Corporate sustainability a work in progress, report finds

A new report measuring the sustainability of global large cap companies finds that many firms are demonstrating positive sustainability impacts, along with some leadership on environmental, social and governance (ESG) issues.

However, the report by global investment research firm EIRIS reveals that there are significant differences in the extent to which companies are on track to tackle the broad sustainability challenges they face.

For example, companies in the United Kingdom and continental European companies are outstripping their American and Asian counterparts on sustainability performance. And smaller companies generally lag behind larger ones.

"Big differences in corporate sustainability performance exist at the global and regional level. Tighter sustainability legislation in Europe and more public awareness contributes to this difference" said report author Mark Robertson.

The greatest level of sustainability is shown in those sectors that provide products and services with a sustainable benefit, the report says, such as health care and alternative energy.

Some sectors are inherently unsustainable, the report says, including oil and gas and mining, and need to re-focus their business drastically in order to offset negative impacts.

Among the sustainability leaders are sportswear company Puma, which has a strong environment record and has improved its supply chain labour standards, and drug maker GlaxoSmithKline, which has shown strength in supplying drugs cheaply to developing companies, the report says.

Swiss pharmaceutical giant Roche was praised for its strong equal-opportunities policies and its advanced code of ethics with strong anti-bribery rules. Philips Electronics made the top 10 for progress on environmental issues, particularly through increasing the energy-efficiency of its products.

Laggards included computer giant Apple, which EIRIS says needs to do more to address sustainability challenges - particularly those related to supply-chain risks. Other weak performers include ExxonMobil, which shows poor performance in the areas of biodiversity, climate change and water management and Toyota, which produces greener cars, but lags behind rivals on human-rights and supply-chain-labour standards.

"There are signs that companies are making sustainability a priority and acknowledging its importance, not only in terms of acting as good 'corporate citizens' but also in terms of ensuring their own long-term success,” says Carlota Garcia-Manas, Head of Research at EIRIS. “However, it's clear that companies need to do much more if they are to meet the concerns of their stakeholders and investors whilst managing the impacts of their businesses upon society and the environment in a sustainable way, both now and in the future."

Download the full report.