Framing the perfectly sustainable company has always been a challenge, but never one that Toronto-based Corporate Knights has shied away from. The well-known media and financial products company released its eighth annual tally of the top 100 multi-billion-dollar companies this week. And there was no better place to announce the findings than the World Economic Forum, in Davos, Switzerland.
It’s a heady list of who’s-who from every corner of the industrialized world. The U.S., which was represented by 20 companies, took the lion’s share of kudos.
The top 100 big companies were culled from a list of 4,619 entrants that had a market capitalization of at least $2 billion. The rating system looked at 12 key performance indicators, including but not limited to: energy, water, waste and carbon productivity; leadership diversity; inovation; and CEO-to-worker pay equity. It also examined each company’s financial sustainability, the kinds of products it manufactures or services it provides, and any sanctions it may have accumulated in relation to the above standings. A full breakdown of the strategy Corporate Knights used in the evaluation is available in its overview of methodology.
At the top is Biogen Idec, a pharmaceutical company that researches and produces treatments for autoimmune, hematologic and neurodegenerative conditions. Biogen is responsible for breakthroughs in the treatment of some of the world’s most pervasive and debilitating diseases, such as multiple sclerosis, hemophilia and leukemia. The company is also in trials for a treatment for Alzheimer’s. Corporate Knights awarded it a score of 73.5.
Key strengths that contributed to its score, says Corporate Knights in its profile of the winning company, include:
- Economic standing: Its revenues are up 26 percent from 2013, when it reported earnings of $6.9 billion;
- A cogeneration unit that reduces Biogen’s reliance on the grid;
- Four new gold or platinum buildings to help it reduce its carbon footprint and conserve energy
Diversity in its senior ranks was one area in which Biogen could have scored higher. Its women-to-men ratio was only 17 percent, although the ratio on its board was higher (27 percent). Biogen’s CEO George Scangos acknowledged that this was a goal the company needed to improve.
Irvine-based Allergan, the No. 2 company on the Corporate Knights list, scored 72.8. The pharmaceutical company is best known for its botox injections but is also a groundbreaker in ophthalmic (eye) treatments.
There were also a few surprises on the list. Textile and footwear manufacturer Adidas came in third with a score of 72.6. Adidas has been criticized in the past for labor practices, specifically relating to last year’s labor conflicts in China. Still, its progress on the environmental front appears to be improving. In 2014, it laid out a plan to become “toxic free” by 2020. According to Greenpeace, it is making strides on this, which likely contributed to its No. 3 ranking.
“Approach [is] driven by data not by judgment,” states Corporate Knights.
And there were some surprises at Davos, as well. While labor diversity is now considered a key factor in determining sustainability, its prominence seemed to be underplayed at the World Economic Forum. According to an article in the Guardian (sponsored by The B Team), only 17 percent of the delegates were women.
“Davos is both a victim and an indicator of its surrounding reality,” notes author Omid Aschari, who is a professor of strategic management and the managing director of the SIM-HSG Master’s program at the University of St.Gallen, Switzerland. “The business world is only slowly coming to understand that leadership, in essence, is about walking the talk.”
Perhaps Corporate Knights’ focus on diversity, and the companies that strive to excel in this area, will set new benchmarks at the 2016 World Economic Forum as well.
Biogen Idec logo: Biogen Idec
Image: Davos Intercontinental Hotel – Kecko