At a time when ESG is being attacked on all sides (the acronym, rightly so; the underlying sentiment, incorrectly), Barron's annual ranking of the "Top 100 Sustainable Companies" appeared in the article in the url below. You might be surprised at the No.1 company on the list (for the second year running):
"Clorox holds the crown for the No. 1 spot on the list for the third consecutive year. The consumer staples company, which owns household brands such as Burt's Bees, Glad, and Hidden Valley Ranch, scores high based on environmental factors, product safety and quality, and governance. While last year the company stood out for achieving gender pay equity, this year it gets kudos for linking executive compensation to how well they meet their sustainability goals."
In fact, I was quite surprised at how many manufacturing companies made the Top 10 in the table accompanying the article:
Overall, the story was surprisingly positive:
"… while ESG critics have been cranking up the volume, the better barometer of the sustainability movement's strength comes down to a simple question: How committed are large companies to their sustainability goals? For now, most aren't backing off them, and many are making significant advancements."
As with such lists, the methodology was biased and opaque, but at least the ultimate DV seems appropriate – "operations and risk":
"The 100 companies on our list this year span market capitalizations ranging from American States Water's $2.8 billion to Nvidia's $3.4 trillion—companies that were ranked No. 73 and No. 74, respectively, on their sustainability. To evaluate all the companies, Calvert considered practices under five themes—the planet, workplace, customers, community, and shareholders—and assigned each company weightings for the categories based on what is most relevant to their business operations and risks."
It was good to see a positive narrative around a topic that has been nothing but doom-and-gloom for several months:
"The symbiosis between sustainability and efficiency at the top 100 companies often translates well for investors. In the first six years of Barron's ranking, the group outpaced the S&P 500. The 100 badly trailed the index's 25% and 26% returns including dividends in 2024 and 2023, respectively. But in those years, seven technology stocks fueled most of the S&P 500's return because the index is weighted by market capitalization."
Take care
David
David Chandler
© Sage Publications, 2023
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Top 100 Sustainable Companies: Coping with Anti-ESG Sentiment
By Karen Hube
February 24, 2025
Barron's
Late Edition – Final
18, 20, 22
