A ranking of the world’s top-100 sustainable companies by Corporate Knights has listed 11 Canadian companies, making it the second-most recognized country.
The 2023 Global 100 ranking rates the world’s most sustainable companies by environmental and governance metrics. It is the 19th time Corporate Knights, a Toronto-based media and research outlet covering the sustainable economy, has published such a ranking.
Corporate Knights measured over 6,000 publicly-traded companies with over US$1 billion in revenue across 25 key performance indicators. Half of the weight is from sustainable investment and sustainable revenue, the remainder from metrics such as the percentage of taxes paid and the percentage of non-male board members.
Topping the list is Schnitzer Steel Industries Inc., a Portland, Ore.-based steel manufacturer and scrap metal recycling company. Danish wind turbine manufacturer Vestas Wind Systems A/S and Australian logistics company Brambles Ltd. placed second and third, respectively.
The top Canadian performer is Stantec Inc., placing seventh. Corporate Knights says the number of Canadian companies is second only to the U.S. with 20 listings.
The A- and B-grade Canadian performers
Stantec, an engineering firm headquartered in Edmonton, earned an A-minus grade. It showed the second-highest percentage of sustainable investment out of the Canadian companies, third-highest on percentage of sustainable revenue and scored well on the ratio of non-males and racially diverse executives on its board.
The company recently debuted four software solutions on Microsoft’s Azure Marketplace. It jumped from No. 17 on the 2022 Global 100 list.
Cascades Inc., a materials and packaging company in Kingsey Falls, Que., placed No. 20. The B-plus performer received 100 per cent scores for sustainable revenue and sustainable investment.
The first Canadian telecommunications firm on the list is Telus Corp., based in Vancouver. It was given high scores for sustainable revenue (94 per cent), sustainable investment (87.5 per cent) and for board and executive diversity. Telus was given a B-grade.
BCE Inc., or Bell Canada Enterprises, is the next telecommunications company at No. 42 – its first listing. The Verdun, Que.-headquartered company had the highest sustainable investment ratio among Canadian companies at 96 per cent. BCE also earned a B-grade.
Cogeco Communications Inc., also made the list at No. 45. Cogeco made a significant improvement from No. 81 in 2022, elevating it to a B-grade. It scored well on sustainable revenue (85 per cent), sustainable investment (91.1 per cent) and linking sustainability to pay (70.9 per cent).
Gildan Activeware improved from No. 79in 2022 to No. 60. The Montreal-headquartered apparel manufacturer earned a 100 per cent score for sustainable revenue, but performed poorly on supplier score. It received a B-minus grade.
While not headquartered in Canada, Brookfield Renewable Partners LP was the fourth-highest company on the list, earning an A-grade. Brookfield Renewable Partners is majority-owned by Toronto-based Brookfield Asset Management.
The C-grade performers
Insurance company Sun Life Financial Inc. placed No. 77, a drop from No. 55 in 2022. It did well on board and executive diversity. However, it was given a C-plus grade, with low performance on employee turnover and pension fund quality.
Teck Resources, a Vancouver-based mining company, earned a 96.8 per cent score for sustainable investment, 88.5 per cent for a racially diverse board and 76.4 per cent for sustainability pay link. It placed No. 78 and received a C-plus.
Bank of Montreal dipped from No. 80 in 2022 to No. 88. The Toronto-headquartered bank did well on cash tax paid (71 per cent score) and sustainable revenue (86 per cent) and was a leader in having a gender-balanced board (95.8 per cent). But high employee turnover and ratio of CEO to average worker pay impacted its overall grade, giving it a C-grade.
Retailer Canadian Tire improved slightly at No. 90 from No. 98 in 2022. It scored well on ratio of sustainable revenue and sustainable investment, but was rated poorly for non-male boards and received a zero for pension fund quality. It received an overall C-grade.
Winnipeg-based IGM Financial Inc. tumbled from No. 41 in 2022 to No. 92. The asset management company scored well on energy productivity and sustainable revenue, but showed gaps in its board and executive diversity and pension fund quality. It earned a C-grade.
The global trends to watch
In an article accompanying the ranking, Corporate Knights says investments in renewables, smart buildings, electric vehicles and climate solutions are being stimulated by high oil prices.
Ralph Torrie, Corporate Knights’ research director, points to deliberate corporate investment policies and strategic decisions leading the trends in “increasing electrification, energy efficiency and digitization, the improvement in sustainable revenues and investments.”
To underscore how sustainability has become a priority in business, Corporate Knights compared the Global 100 as an index to blue-chip benchmark MSCI ACWI and other ESG indices.
It found the Global 100 Index outperformed MSCI ACWI with a total investment return of 270.7 per cent compared to 222.1 per cent.