The World’s Most Sustainable Companies

TIME and Statista released this week their first ever World’s Most Sustainable Companies list. The ranking process began with a list of over 5,000 of the world’s “largest and most influential companies”, considering factors such as revenue, market capitalization, and public prominence. They then followed a 4-step methodology to identify the top 500 companies, analyzing more than 20 key data points. This included excluding companies involved in non-sustainable industries like fossil fuels or deforestation, using sustainability ratings and commitments from reputable organizations, evaluating the availability and quality of their annual sustainability reports, and analyzing KPIs across all three ESG pillars.

What can we learn from this list?

Only 1 LatAm company made the Top 100: Lojas Renner.

This may be influenced by LatAm’s market size (it’s very likely that just a handful of LatAm companies were analyzed since most are relatively small on a global scale). But if we look past that, here are 3 things that stand out to us that may have helped:

1. Lojas Renner has been an early adopter of sustainable reporting. It started reporting under GRI’s methodology in 2010. Sustainability reports have received independent assurance since 2014. It moved to an integrated report framework by 2015 and adopted SASB indicators in 2019 and TCFD’s disclosures in 2020. It has already adopted ISSB’s S1 and S2.
2. Lojas Renner cares a lot about innovation and technology. It has launched products with infinite recyclability, innovated to have less impactful manufacturing, and has won several awards on their tech capabilities.
3. It has demonstrated a culture of continuous improvement even in governance practices. This can be evidenced by their board of directors which has almost purely independent members. Continuous benchmarking against best practices is a great avenue to find areas of improvement.

Only 2 Mexican companies made the list: America Movil (ranking #255) and Banorte (ranking #324).

We are actually quite surprised none of the consumer companies made it to the list since we have some great examples of companies with very mature sustainability practices (like Bimbo and FEMSA). It may be the case that the gap to international best corporate governance practices weighed heavy, cause even alcohol producers such as Diageo got into the Top 100.

We have explained before that grading and ranking sustainability practices is no easy task. It is true that all methodologies will always have a certain bias, but it is also true that we can learn something from them. So let’s take this as an opportunity to see what a LatAm company has done to stand out, and take the lessons that we can from there.

I hope you found this interesting. As usual, if there is anything we can help you with, or if there is an ESG topic you would like to know more about, please let us know.

Best,

Marimar

CEO, Miranda ESG