TORONTO, June 29, 2022 /CNW/ - This morning, Corporate Knights Inc. released its 2022 list of the Best 50 Corporate Citizens in Canada, celebrating the 20th anniversary of the pioneering annual ranking of corporate sustainability performance.
In an environment of increasing skepticism directed toward corporate sustainability ratings, Corporate Knights' annual Best 50 Corporate Citizens stands out for its transparent, quantitative methodology that places equal emphasis on the ESG (environmental, social and governance) performance of a company's operations and the environmental impact of its core products. Selected from a pool of 332 Canadian entities, including all those with revenues over $1 billion ? each evaluated on a set of 24 ESG indicators, relative to their industry peers and using publicly available information ? the 2022 Best 50 companies are at the vanguard of corporate sustainability leadership in Canada.
This approach has stood the test of time, proving that better corporate citizens can beat the market, as demonstrated by the Best Corporate Citizens' stock market performance with a 499% gross return since it was first launched in June 2002, versus 366% by its benchmark, the S&P/TSX Composite.*
A lot has changed over 20 years, not all for the better. Corporate profits doubled in Canada (as a share of GDP), but workers shared in fewer of these gains than CEOs (who made about 106 times as much as their average employee in 2022, a ratio that has grown by more than 50% since 2002). There was also some good news: large Canadian companies now earn almost a quarter (24%, up from 18% in 2021) of their total revenues ($113.6 billion) from products and services that have a beneficial environmental or social impact, as determined by the Corporate Knights Clean Taxonomy, which is aligned with the United Nations Sustainable Development Goals (SDGs). Best 50 companies continue to lead the way, earning 37% of their revenues in line with the clean economy. That's six times more than the 6.2% clean revenue earned by other big Canadian companies (excluding the Best 50).
Almost no companies had net-zero commitments five years ago, but the tides are changing. Today, 40% of large companies around the world have net-zero commitments (by market capitalization). Still, Canadian companies lag. Even among Canada's corporate sustainability leaders, just 13 of this year's Best 50 companies have made net-zero commitments. However, 25 (50%) achieved year-over-year emissions-intensity reductions of at least 7.6%, the rough global benchmark to be aligned with a net-zero trajectory.
Equally important is the evolving corporate social landscape. In 2002, non-male directors made up a mere 14% of board positions among all large companies in Canada, compared to the 27% of non-male directors that are helping guide large businesses today. Among the Best 50, 37% of directors are now non-male.
Corporate boards are becoming more racially diverse as well: Across all large companies, 7% of board members are now non-white, compared to just 4% in 2011, when Corporate Knights first began tracking this metric. Among Best 50 companies, 9% of board members are non-white.
"While things are heading in the right direction for the most part, we need to speed up on climate action, pay equity and diversity to keep up with the rest of the world," says Corporate Knights CEO Toby Heaps.
This year's top three companies are Hydro-Québec (1), Innergex Renewable Energy Inc (2) and Brookfield Renewable Partners L.P (3). Hydro-Québec placed first for the second consecutive year, due to its top-quartile scores on Carbon and Water Productivity, Taxes Paid Ratio, CEO?Average Worker Pay Ratio, Executive and Board Gender Diversity, and Clean Revenue (earned from electricity generation from renewable sources).
In 2002, Toby Heaps, Corporate Knights' co-founder and CEO, made a bold claim: in a world where profit-driven corporations were often seen as the antithesis to the common good, Heaps described how the modern corporation could act as an "incubator for human progress and wealth creation." The belief that companies could be guided by purpose, equity, integrity and sustainability inspired Corporate Knights to embark on a data-driven search for Canada's best corporate citizens. This commitment to measure companies on what matters most for people and the planet has now spanned over two decades.
For comparative results, financial returns and more, please visit our virtual newsroom: https://corporate-knights-newsroom.prezly.com/20-years-on-canadas-best-50-have-shown-that-better-corporate-citizens-can-beat-the-market
SOURCE Corporate Knights Inc.
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