This year, Barron and Calvert Research and Management added a second ranking of the most sustainable companies — the 20 outside the United States. They are a diverse group, but have characteristics similar to our US companies — including the outperformance of stock prices.
As a group, the shares of the 20 companies fell 11.1% in 2018, compared to the 13.6% drop in the
iShares MSCI EAFE
exchange fund (ticker: EFA).
“International companies have generally outperformed US companies when it comes to overall sustainability scores, but it doesn’t matter. [of what country they’re in], we are seeing companies across all industries making strides in managing the environmental and social impacts that are important to their business, ”said Anne Richardson, COO of Calvert.
Calvert selected the international list using the same methods as for US companies. Specifically, he took the 1,000 largest public companies by market value in 24 developed country markets excluding the United States. He then rated them using the same scoring process and five stakeholder categories that he used to guide the US list.
The group’s overall score is also higher than that of the United States. Non-US companies have an average score of 77; the average score of the top 20 American companies is 71. With the exception of Australia
a sustainable logistics company, and Singapore
real estate operator, the companies in our international top 20 are all European.
* Ranking based on an unrounded weighted average; ** Returns in local currency
Sources: Calvert Research and Management, a unit of Eaton Vance; FactSet
European companies have long been at the forefront of ESG concerns, both from a public policy and investment perspective, with many regulators and authorities keen for pension funds and others to include more ESG criteria. European companies have been writing sustainability reports and publishing ESG information for a longer period of time. For example, in June, member states of the European Union are expected to produce new regulations to improve transparency for businesses and investors, according to a report by Institutional Shareholder Services. France is studying a bill which, among other things, could “impact the representation of employees on boards of directors, the governance of employee shareholding funds, remuneration ratios and the implementation of the revised directive on shareholders’ rights, ”the report said. In Germany, the German Corporate Governance Code Commission makes new recommendations on the independence of the supervisory board and includes new wording suggesting the introduction of premium clawbacks after
Nonetheless, the United States should catch up quickly, especially when it comes to sustainability accounting standards, says Bruno Bertocci, head of global sustainable equities at UBS Asset Management.
The top of the list is
the Dublin-based consulting and professional services giant that has adopted several best practices in data security and privacy, says Calvert. It is also strong for the employees. In 2017, the company cut 17,000 back office jobs through automation, but retrained the majority of those employees on new technologies like cloud, artificial intelligence and robotics, so everyone can stay in the business.
Diversity and inclusion are also strong at Accenture. The company aims to have a workforce of 50% women by 2025 and with 25% of CEO positions held by women by 2020. Last September, Thomson Reuters named Accenture to the top of its list of top companies. most diverse and inclusive in the world.
Number 2 is Australia’s Brambles, which supplies pallets, crates and containers through a ‘share and reuse’ model. Brambles also performs well in the workplace, Calvert says: he conducts an employee engagement survey and uses confidential feedback to improve operations. In 2017, she created employee focus groups in North America. It offers online training and one-on-one coaching for employees. He was also the pioneer of pallets made from waste. One fan is Bertocci from UBS. Brambles is a “good way to play a rebound in global trade, good management, good governance, good ESG,” he says.
No. 3 is the French hotel group
what Calvert calls a “leader in water management and water consumption reduction.” By 2020, the company plans to reduce the average water consumption per night in its hotels by 5%. He is also working on water recycling.
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