LONDON, Jan 18 (Reuters) – As boardroom bosses and billionaires mingle on the snowy streets of Davos, corporate sustainability is a key topic of discussion. Yet which company is the most sustainable in the world?
Rather surprisingly, research firm Corporate Knights says the answer is Schnitzer Steel Industries ( SCHN.O ), a U.S. scrap recycling company that has displaced wind turbine maker Vestas Wind from the top spot.
Portland, Oregon-based Schnitzer Steel reported improvements in energy, carbon, water and waste performance in 2021 to top the 2023 Global 100, a list of the companies Corporate Knights believes are doing the best for people and the planet.
“Schnitzer Steel is the first steel company to top the Global 100,” said Corporate Knights CEO Toby Heaps.
“If one of the world’s dirtiest sectors can create the world’s most sustainable company, then there is no excuse for any company in any sector not to step up.”
Companies are judged on 25 metrics, including sustainable revenue and investment, carbon performance, racial and gender diversity, and must have sustainable solutions at the core of their business models and invest to reduce their carbon footprint.
Schnitzer Steel earned the top spot with a 74% increase in energy productivity, a 69% increase in water productivity and a 55% increase in carbon productivity in 2021 – with productivity meaning more efficient use when measured against revenue. It also reported 100% of its $2.8 billion in revenue and all of its $0.1 billion in investments went to sustainable projects in 2021, though the report did not detail the projects.
Schnitzer Steel did not respond to a request for comment.
Corporate Knights’ Global 100 is used by companies such as Goldman Sachs to build private wealth portfolios and will serve as a benchmark for a new index fund and exchange-traded fund from Canada’s Mackenzie Investments this year.
Although the index does not account for profitability, the benchmark has outperformed the MSCI All Country World Index (ACWI) on an annualized basis for seven of the past 11 years.
In 2022, the Global 100 beat the ACWI on an annual basis return of 2.8%, although both were significantly lower than 2021 at -15.6% and -18.4%, respectively. Between 2013 and 2022, the Global 100 returned 145.1% compared to 115.4% for the MSCI ACWI.
“The story of outpacing sustainability is sustainable even in a period of oil stock inflation,” Heaps said.
Proponents of sustainable investing say that choosing companies with better environmental, social and governance (ESG) scores can deliver higher returns. But the strategy has faced pushback from US policymakers and politicians who argue that ESG-investing runs counter to fiduciary duty.
Second, Vestas head of sustainability Lisa Ekstrand said the ranking was valuable for comparing companies in different industries on the same transparent scale, which is “notoriously difficult”.
Vestas uses the ranking to identify areas for improvement, she said.
Reporting by Virginia Furness and Simon Jessup Editing by Tommy Regory Wilkes and Josie Cao
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