Corporate Eye

One View of the Best Green Investments

Logo of SB20 Top Twenty Sustainable BusinessesIt’s the last weekend of the school holidays. After eight weeks, the circling sharks of my children close in for the kill. I give in to their pleading cherubic faces beaming up at me and say yes. Yes, we can go to a Theme Park.

Normally I hate the things:

  • lots of other people screaming for no reason – go mountain climbing if you want scarey exercise;
  • long queues waiting for something disappointing to happen – much like seeing the latest pulp Hollywood movie;
  • drinks sold at vastly inflated prices – you can get that at a shopping mall without having to pay the whopping entrance fee.

(I wonder, is my natural grumpiness showing yet?)

However this time I was pleasantly surprised. Yes, there were queues, screaming and overpriced drinks. But some of the rides were actually worth it, and I almost enjoyed the day out!

Surprising Sustainable Business
I was similarly surprised when I came across the SB20, compiled by Sustainable Business.com. This claims to be a definitive list of the Global Top Twenty Sustainable Businesses.

Usually these things are based upon some kind of tangible measure, such as market capitalisation, funds committed towards sustainability programmes, membership of schemes or targets achieved.

This is all very well for providing figures for comparison and analysis. However it also leads to greenwashing as companies concentrate on ticking the right boxes rather than attempting to change their culture.

In comparison, the SB20 is based solely upon the professional opinion of the judges concerned. In addition it is based upon progress made rather than targets achieved, meaning small and large companies can compete on a relatively level playing field.

Basic Criteria

The SB20 is published as part of Sustainable Business’ Progressive Investor ezine, which discusses publicly listed companies across the world.

Therefore, although the SB20 is explicitly not a buy list of companies, companies have to be in a position where they would enhance a portfolio.

Companies also have to meet basic sustainability and financial criteria as follows:

  • the company has to have made significant progress in the previous year in implementing sustainable management processes or growing a business based upon green technology
  • the company must be profitable or have a strong revenue stream

The judges themselves come from a typical range of investment professionals: two research companies, two wealth management companies and a bank.

The Companies
As mentioned above, businesses which are listed in the SB20 fall into one of two broad camps: either their business in built upon the use of sustainable technology, or they are a conventional business which has made significant progress improving the sustainability of its processes and suppliers.

Just under half of the companies fall into the latter group, known as corporate pioneers. This includes giants such as IBM, Google and Hewlett Packard, as well as the not-so-well known such as the Brazilian cosmetics firm, Natura Cosmeticos.

Other companies are listed according to the sector they belong to. Typically, these are energy production, water and building. However it’s worth noting that the Climate Exchange, one of the first emissions trading brokers, is also part of the list.

In addition to these, a “core” list of companies has also been published. These are businesses which Sustainable Business considers to be examples of excellence in their field.

A Good Professional Tool
SB20 is a good little tool to help investors identify public companies who are growing through their sustainability endeavours. It is, however, also a promotional product.

Often with these lists there is some kind of commentary to help explain the judges’ decision making rationale. This is no exception, but sadly you have to subscribe to Progressive Investor to get the full disclosure. This is a little bit of a shame but isn’t out of line with common practice.

What remains to be seen however is whether the SB20, now in its seventh year, will gain widespread notoriety. If it does I wonder whether the judges be able to rely solely upon their own professional judgement, or will pressure come to bear for them to justify their conclusions with harder facts and figures?

It will be interesting to find out.

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A former CTO, Chris has a broad and varied background. He’s been involved with blue chips, consultancies & SMEs across a wide variety of sectors and has worked in Europe, the Middle East and Australia. In 2007 he decided to combine his knowledge of business and IT with his passion for all things sustainable and has been busy writing ever since. However, his greatest ambition remains to brew the perfect cup of coffee.
 
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