Business’s sustainability spending leads to better revenue outcomes, Corporate Knights finds

Nearly 63% investors are unable to discern whether balance sheets accurately reflect climate impacts.

This is according to the recent ‘2024 Global 100 Index’ from Corporate Knights, a media and research organisation specialising in corporate sustainability.

The index evaluated 6,733 companies with revenues exceeding $1bn, ranking them based on their impact on people and the planet.

According to the index, the 100 most sustainable corporations globally invested 55% of their capital expenditures, research and development, and acquisitions in green themes. This was in contrast to an average of 17% for large companies overall.

Additionally, the top companies generated three times more sustainable revenue, comprising 51%, versus the average large company’s 16% of total revenue.

This inspires a positive outlook following edie’s latest survey of 250+ sustainability leaders, which unveiled notable challenges for organisational sustainability strategies, including issues such as insufficient funds and limited participation from finance departments.

Since its inception in 2005, the Global 100 Index has consistently outperformed, yielding a total return of 295% by the end of 2023.

In comparison, the MSCI ACWI, a stock index designed to reflect overall global equity-market performance, recorded a return of 278% during the same period.

Corporate Knights’ chief executive officer Toby Heaps said: “The Global 100 index has outperformed over time because Global 100 companies back up their green commitments with their investment dollars.

“Sustainable investment themes like clean energy are growing exponentially, and the Global 100, across sectors, are helping to drive and are poised to thrive in the low-carbon economy.”

Front-runners in the ranking

Leading the 2024 ranking are two Australian companies: Sims Limited and Brambles Ltd. Metal recycling firm Sims operates in 14 countries, while Brambles rents recycled shipping pallets and containers globally.

The index assesses the companies across 25 key performance indicators including resource management, employee management, financial management, supplier performance, sustainable revenue and sustainable investment.

Both companies achieved a perfect score of 100% in both sustainable revenue and sustainable investment.

The 2024 ranking also welcomed 32 new companies, contributing to the expansion of the index’s geographic reach, with a considerable increase in representation from China.

Heaps added: “When we first did the Global 100 ranking 20 years ago, the green economy was a quaint idea.

“It is now the overwhelming driver of global economic growth, and we are enthusiastic that the Global 100 will continue to lead the way over the next 20 years and beyond.”