Which business is the most sustainable in the world? Surprisingly, research company Corporate Knights claim that Schnitzer Steel Industries, a U.S. waste steel recycler, is the number one. Schnitzer Steel Industries has dethroned wind turbine manufacturer Vestas Wind from the top rank.
Based in Portland, Oregon Schnitzer Steel led the 2023 Global 100, a ranking of businesses that Corporate Knights believes to do the best for people and the environment. Schnitzer Steel showed increases in energy, carbon, water, and waste products in 2021.
According to Toby Heaps, CEO of Corporate Knights, Schnitzer Steel is the first steel company to rank among the Global 100.
If the dirtiest can become sustainable business…
There is no justification for any company in any area to remain complacent if one of the dirtiest industries in the world can produce the most sustainable business in the world.
Schnitzer Steel is a recycling company that specializes in collecting and processing ferrous and non-ferrous metals. Their “green recycling” practices include the use of energy-efficient equipment, reducing emissions, and implementing sustainable business practices.
They also follow strict environmental regulations and guidelines to ensure that their operations have minimal impact on the environment. Schnitzer Steel diverts millions of tons of metal from landfills each year and also works to conserve natural resources by recycling metal instead of mining new materials. They have also invested in research and technology to improve their recycling process. Thus, Schnitzer Steel’s green recycling efforts contribute to a more sustainable future.
What are the criteria to become the No.1 sustainable business?
They evaluated businesses based on 25 characteristics, including sustainable revenue and investment, carbon productivity, racial and gender diversity, and the need to invest in low-carbon technologies at the core of their business models.
With a 74% rise in energy productivity, a 69% increase in water productivity, and a 55% increase in carbon productivity in 2021, Schnitzer Steel took the top rank. Productivity definition is utilizing resources more effectively as compared to income. Additionally, it stated that all of its investments totaling $0.1 billion and $2.8 billion in 2021 were made in sustainable projects, albeit the report did not specify which ones.
Global 100 as the benchmark for a new index fund
Corporate Knights’ Global 100 is the benchmark for a new index fund and the exchange-traded fund from Canada’s Mackenzie Investments this year. Institutions like Goldman Sachs utilize it to build private wealth portfolios.
The benchmark has beaten the MSCI All Country World Index (ACWI) on an annual basis for seven of the previous eleven years, despite the fact that the index does not take profitability into account.
The Global 100 outperformed the ACWI in 2022 in terms of yearly returns, albeit both were severely down from 2021 at -15.6% and -18.4%, respectively. The Global 100 returned 145.1% between 2013 and 2022 compared to the MSCI ACWI’s 115.4%.
The sustainable business narrative stays beside the oil prices rise
According to Heaps, the sustainable out-performance narrative is persistent even during a time of rising oil stock prices.
Theoretically, choosing companies with higher environmental, social, and governance (ESG) scores could result in higher returns, according to proponents of sustainable investment. However, opposition to the plan has come from American lawmakers and policymakers who contend that ESG investing violates fiduciary duties.
Second-placed Head of sustainability at Vestas The score, according to Lisa Ekstrand, is useful for evaluating businesses across industries on an equal, transparent scale, which is “notoriously difficult.”
According to Vestas, the ranking helps her pinpoint areas for growth.