Corporate Knights Inc. and Innovest Strategic Value Advisors have published their fifth annual Global 100 list of the most sustainable large corporations in the world. The Global 100 doesn't rank the companies. Instead, it simply identifies the 100 global leaders and stops there. It uses a nationalistic framework, providing a tally of how many companies per country came away with the gold. The result is a sort of corporate sustainability Olympics.

In what may come as a surprise to observers who view the United States as a sustainability laggard, the country topped the Global 100 list with 20 companies, up from 16 in 2008. The United Kingdom came in second with 19 (down from 24), while Japan was was third with 15 (up two). Fifteen countries made the list altogether, all from developed economies. There were no companies from Russia, China or India.

Corporations on the list include familiar names like Coca Cola, Dell, Hewlett-Packard, Honda, Nike, and Procter & Gamble. A surprising absentee was IBM, which has a strong reputation as an environmental leader.

The publishers took the unusual step of tracing all Global 100 companies back to their year of origin. They did so to test the hypothesis that top-performing companies will tend to be long-lived because of what the Global 100 press release dubbed "their holistic approach to managing stakeholder relationships." It turned out that the oldest company on the list, the Finnish company Stora Enso OYJ, was founded in 1288, while 46 of the companies on the list had been in existence at least 100 years.

Toby Heaps, Editor of Corporate Knights magazine, concluded, “While markets go up and down, companies like the Global 100 members that prudently take care of the interests of all their stakeholders offer the best bet for society and investors in the long-term.” Frankly, this seems like a bit of a stretch. For one things, companies with a long history will tend to be larger than younger ones, so the sample is naturally biased toward older companies. Also, many of these companies have probably had uneven performances over the years. Nike, for instance, may be a sustainability winner today but it was on everyone's list of Evil Corporations scarcely a decade ago. My own inclination would be to take Heaps' conclusion with a grain, or maybe that should be a heap, of salt. Still, it's an interesting data point--and who knew that a thriving global company dates back to the Middle Ages?

The companies were evaluated based on how effectively they manage environmental, social and governance risks and opportunities relative to other companies in their sector. The Global 100 list's publishers expect these companies to outperform their peers financially too, and over the years this has turned out to be the case. Since its inception in 2005, Global 100 companies have outperformed the MSCI World Index, a widely-used benchmark for global stock funds, by 480 basis points per year. 
 
According to Matthew Kiernan, CEO of Innovest, an investment advisory firm whose analysis underpins the list, “The continuing out-performance of the Global 100, even in the midst of the current global financial crisis, provides eloquent testimony–and yet more evidence–for investors, company executives, governments, and civil society  alike: superior positioning and performance on environmental, social, and governance issues does provide a valuable leading indicator of better-managed, more agile, ‘future-proof’ companies..”

Compilations like the Global 100 have real value beyond the obvious public-relations benefits they bring to their originators. They encourage executives to strive for social and environmental excellence—what executive doesn't want their company to be honored?—and they also publicize the fact that sustainability isn't a cost. It's an important and effective strategy.