Not nearly enough, would be the simplest way of summing up the key findings of the study. Only one in six (16.7 per cent) of the companies from the global MSCI World equity index which have been rated by oekom research currently demonstrates a good level of commitment to sustainable development. Not a single company has qualified for the “very good” category. Around a third of the companies (31%) can point to at least some sustainability management initiatives, but sustainability management is still not being integrated systematically and comprehensively in companies’ management systems. Over half the companies (52.3%) have so far taken little or no action in this area.
In the sectoral comparison, companies from the paper and forestry industry have taken the lead. They achieved an average score of 47.7 out of a possible 100 for their sustainability management. Matthias Bönning, COO and Head of Research at oekom research, comments on this result as follows: “The very industry which, more than any other, stands for sustainable management has thus failed to achieve even half of the maximum possible score.” Second and third places in the ranking were taken by manufacturers of household products (45.4) and car manufacturers (40.8). At the bottom of the table were the retail trade (21.7), the property sector (20.6) and the oil and gas industry (18.9). Banks (23.0) and insurance companies (24.1) also failed to reach even 25 per cent of the maximum possible points score.
Significant differences can also be seen in the country comparison. Of the companies listed in the MSCI World equity index, more than 40 per cent of Finnish, Italian, German and Dutch companies, respectively, achieved oekom Prime status. This is awarded to companies which are leaders in their sectors in terms of sustainability management. In the US, this applies to fewer than one in ten companies (9.5%), and in Japan to only 7.3% of companies.
Matthias Bönning notes that “there are also huge differences in the way companies are tackling the seven major challenges of sustainable development.” Besides climate protection, species protection and the fight against poverty, these include supplying people with clean water, forest protection, demographic change and combating corruption. “It is noticeable that in almost all the areas for action we have analysed there are some pioneering companies demonstrating to the rest of the sector what can be done,” says Bönning.
An example of this is the question of what pharmaceutical companies are doing to provide people in developing countries with access to the medicines they need. The best-performing company, the UK pharmaceuticals manufacturer GlaxoSmithKline, scored 83 out of a possible 100 for its measures in this area. Areas in which the company scored highly included discounted prices for urgently needed medicines and vaccines and voluntary granting of licences for drugs, as well as support for local health infrastructure.
Water-saving measures by food producers are another example. Here, the food group Unilever showed the highest level of commitment among the companies rated. oekom research awarded the group a total of 72 points out of 100 for its measures, which included a significant reduction in relative water consumption and analysis of the water use of individual foodstuffs over their entire lifecycle. Danone (32 points) and McDonald’s (19) came bottom of the table in this section.
The report contains numerous other specific examples of what measures companies from various sectors are taking in the individual areas for action. These include the development of alternative drives in car production, major energy suppliers’ climate strategies, species protection measures implemented by tourism companies and the use of sustainably produced timber in construction and in the media sector, as well as engagement by banks and insurance companies in the area of microcredits and microinsurance.
Matthias Bönning sums up the results of the analysis as follows: “Despite individual examples of good practice, the majority of companies are falling short of what is needed from the point of view of sustainability. Many of them did not even manage to achieve a score of 40 out of a possible 100. In the light of the huge challenges we face, this is clearly not enough.”
At the same time, there is growing pressure on companies from investors to adopt more sustainable management methods. According to a recent survey by the newly-launched Global Sustainable Investment Alliance (GSIA), more than 10.1 trillion euros worldwide are now invested taking sustainability criteria into account. This equates to a market share of 21.8 per cent of total assets under management. Investors, principally large institutional investors, want to reduce risk by incorporating social, environmental and governance criteria into their asset investment. Companies which do not meet these expectations will in future have to overcome greater hurdles in order to obtain equity or loan capital on the capital market.