**Barron’s 100 Most Sustainable Companies**
Bloomberg: **Barron’s 100 Most Sustainable Companies** have been highlighted for their exceptional performance in environmental, social, and governance (ESG) measures. Calvert Research and Management was instrumental in the assessment, evaluating over 230 ESG metrics. The evaluation covered a broad spectrum of industries, including technology, industrials, and consumer sectors.
According to the report, the sustainable companies outperformed the market in 2023, with an average return of 19%. However, when excluding a small group of large-cap tech companies, the equal-weighted S&P 500 returned only 14%, making the sustainable companies’ performance even more impressive.
Among the top performers were Nvidia, which saw a staggering 239% gain, along with HubSpot, Intel, Applied Materials, and Lam Research. These companies’ strong returns highlight the robustness of sustainable practices across various industries.
A significant trend that emerged from the assessment was the focus on corporate governance and labor relations. Many companies excelled in engaging with their employees and maintaining positive labor relations, even amidst challenges such as strikes and demands for better job protection in the face of technological advancements.
However, the report also highlighted the complex environment companies face in achieving sustainability and inclusivity goals. The backlash against diversity, equity, and inclusion (DEI) initiatives and the challenges surrounding labor indicate that there are still hurdles to overcome. Nevertheless, some companies have shown commitment to these values, leading to higher rankings on the sustainable companies list.
Walmart, for instance, was recognized for its labor practices, including wage increases and receptiveness to worker feedback. However, the company still faces challenges, as indicated by lawsuits and the absence of unionized stores in the U.S.
Clorox topped the ranking for the second consecutive year, praised for its governance structure and commitment to pay equity. Despite operational challenges like a cyberattack, the company remains steadfast in its focus on sustainability and employee welfare.
There were also newcomers to the list, such as Electronic Arts and Trex, who were acknowledged for their strides in DEI and sustainable product offerings, respectively. This diverse representation across industries and initiatives underscores the broad scope of sustainability efforts in the corporate landscape.
The methodology used for determining the rankings involved assessing companies on how they served five key constituencies: shareholders, employees, customers, community, and the planet. This comprehensive review included analyzing various ESG indicators provided by reputable rating agencies and Calvert’s research, emphasizing the importance of holistic performance in achieving sustainability.
Analyst comment
Positive news: The Barron’s 100 Most Sustainable Companies have outperformed the market, with an average return of 19%. This highlights the robustness of sustainable practices across various industries. Companies excelled in governance and labor relations. Walmart and Clorox were recognized for their labor practices and commitment to sustainability. There were also newcomers to the list, showing the broad scope of sustainability efforts. However, challenges related to diversity, equity, and inclusion (DEI) and labor still exist. Analyst: The market is likely to see increased interest in sustainable companies and a focus on improving governance and labor practices across industries.
