Gem of the day

CRD Analytics has released its mega-ranking of the Global 1000 Sustainable Performance Leaders. Here's their methodology:

"Companies included on the list must be publicly traded on a major global exchange, have a market capitalization of at least $1 billion, and publish a sustainability or corporate responsibility (CSR) report.
Companies that meet the criteria are force-ranked by total Sustainable Performance Value (SPV) calculated as the average of four performance dimensions: financial, environmental, social and governance."

The key element of this ranking is that it is the average of those four dimensions. Therefore, a company with immense profits, as we'll see below, can triumph on the ranking despite having fundamentally unsustainable core products and services.

Not surprisingly, the top 10 are dominated by companies in financial services and healthcare with relatively small footprints compared to other sectors: Merck, Novartis, Credit Suisse, Glaxosmithkline PLC.

But the top 50 is where it really gets interesting. Please find my shortlist below of most extraordinary placements on the ranking:

• Newmont Mining Corp (seriously?): 15
• ExxonMobil: 48
• British American Tobacco: 49

Let's examine ExxonMobil more closely. Oh, how the mighty have fallen! In 2008, the corporation ranked 21. In 2007, it ranked a mind-blowing 16. How could an oil company perform so well on such an index? I think the answer is extreme profits and market capitalization, combined with self-proclaimed effective governance and accountability.

This kind of ranking is a serious issue. Not only does it send misguided, short-term investment signals, it basically says to companies like ExxonMobil that business as usual should continue. After all, if ExxonMobil can already be considered a global sustainability leader, there's no work to be done. Right?

Note, as well, this gem of a caveat (I wonder what could have triggered it...):

"CRD Analytics reserves the right to remove any companies that are involved in a significant public crisis without notice."