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February 05, 2008
Yearbook Presents Sustainability Trends and Leaders
by Anne Moore Odell
SAM and PricewaterhouseCoopers offer insights into the sustainability efforts of cutting-edge
companies.
SocialFunds.com --
Many global companies are graduating from just thinking about sustainability practices to actually
including them in their day-to-day operations reports the 2008 Sustainability Yearbook offered by
SAM in partnership with
PricewaterhouseCoopers (PwC). Yet the Yearbook
also states that if people from emerging markets consumed at the rate of people in developed
markets, we would need two extra Earths to meet demand.
 The Sustainability Yearbook 2008 was
presented at the 2008 in Davos, Switzerland, last month. The Yearbook offers environmental, social
and governance (ESG) information on the top global companies in 57 industrial sectors.
Headquartered in Zurich, Switzerland, SAM is an asset manager for sustainability investments
with $7.5 billion under management as of the end of 2007. The annual Yearbook for the first time
in 2008 awarded companies gold, silver and bronze classifications with one company in each sector
named a "sector mover." PwC, a global consulting firm, works with companies to build long-term
value by addressing their sustainability needs.
SAM evaluated over 1,000 companies on
sector specific sustainability criteria for the Yearbook. Of these companies, only the top 15% were
included in the Yearbook. Of the 376 companies in the 2008 Yearbook, 67 companies were placed in
the Gold Class, 74 Companies in the Silver Class, and 63 in the Bronze Class.
"Over the
past years, we have observed that the topic 'sustainability' is on top of the agenda of CEOs which
has a strong impact on the company's strategy," said Kim-My Schefer, Head Corporate Communications
for SAM. "Therefore, the demand for an international reference work that highlights the world's
leading companies in terms of sustainability is very high. After the publication of the SAM
Sustainability Yearbook 2008, some of the awarded companies were informed about their status
(leader, gold, etc.) via press release or on their homepage."
The Yearbook also includes
research from SAM that puts forward a strong relationship between a company's financial performance
and their sustainability efforts. The Yearbook traces investors' movement away from the
old-fashioned idea that the only goal of a company is a short-term profit for stockholders to one
that takes a longer view that addressing sustainability issues enhances profitability for the
long-term. The report also argues that the market is getting better at including extra-financial
information such as ESG issues and acknowledges that how companies respond to ESG issues does
impact stock prices.
"Corporate sustainability is a business approach that creates
long-term shareholder value by embracing opportunities and risks deriving from economic,
environmental and social developments," Schefer told Socialfunds.com. "A defined set of criteria
and weightings is used to assess the mentioned opportunities and risks for the eligible companies.
A major source of information is the SAM questionnaire, which is completed by companies
participating in the annual review. Further sources include company and third-party documents as
well as personal contact between the analysts and companies."
The criteria applied to a
company's sustainability efforts to control risks and take advantage of opportunities differs from
sector to sector. However, the general criteria SAM used to examine sustainability efforts were
divided into economic, environmental and social factors. The economic criteria includes a company's
codes of conduct, corporate governance, and risk and crisis management; the environmental criteria
include environmental performance, and environmental reporting; and the social criteria examined
include corporate citizenship, labor practice indicators, human capital development, social
reporting and talent attraction and retention.
Schefer told Socialfunds.com, "The Swiss
companies are the international leaders considering the three corporate sustainability criteria"
economic, environmental and social. In Asia, the companies improved quite well, especially in China
in the field of renewable energy. US companies have improvement potential in comparison with
European companies."
Companies that "think outside the box" and not only reduce waste and
consumption are the real leaders, the Yearbook states: "Eco-efficiency is not limited to making
incremental efficiency improvements in existing company practices. It should stimulate creativity
and innovation in the search for new ways of doing things."
This year's Yearbook focuses
on water as a global challenge, with the demand for fresh water growing sharply for both domestic
and industrial uses. The growing population, aging water infrastructure, climate change and unsafe
drinking water are four water mega trends that the Yearbook notes.
"Water is big
business," the Yearbook reads. "The sale of water-related equipment and services now produces an
annual turnover of USD $400-500 billion. The price charged to consumers, meanwhile, is often too
low to accurately reflect its value. If the price of water rises, this will have dramatic
consequences in every aspect of our lives, and affect almost all of society's commercial
activities."
SAM's Sustainability Yearbook 2008 offers individual and institutional
investors a real tool to compare companies and their sustainability efforts. And like a high school
yearbook, the timeliness of the information found within the Sustainability Yearbook 2008 is
important. This year's popular sustainable companies will be replaced by next year's sustainability
stars. Companies can't rest on their ESG laurels as SAM looks anew at what companies are doing now
and for the future.
©
SRI World Group, Inc. All Rights Reserved.
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