US-based metals recycling company Schnitzer Steel Industries has managed to jump from ranking 15 in the Corporate Knights Global 100 World’s Most Sustainable Corporations last year to the number one spot this year, showing a continued correlation between sustainable business and high returns.

The ranking is compiled every year by Toronto-based media and research company Corporate Knights and quantitatively compares and ranks the world’s largest publicly-traded companies, equally emphasising the impact of a company’s operations along with its core products and services on people and the planet.

The ranking is based on a rigorous assessment of 6 720 companies with more than $1-billion in revenues.

The Global 100 Most Sustainable Corporations direct nearly seven times more capital into sustainable investment as a percentage of total investments, compared with companies on the blue-chip benchmark MSCI All Country World Index (ACWI), which provides a broad measure of global equity market performance.

The top sustainable corporations also generate ten times more sustainable revenue as a percentage of total revenue, than the MSCI ACWI index.

The most sustainable corporations on Corporate Knights’ ranking continually track higher total returns since its inception in 2005. Even though the ranking does not take risk return into account, it also outperforms every other global sustainability index with at least a ten-year history.

Corporate Knights points out that a dollar invested in an index composed of Global 100 Most Sustainable Corporations on February 1, 2005, would have generated a return nearly 1.2 times larger than the same investment in the MSCI ACWI index.

This year’s Global 100 Most Sustainable Corporations are at the cross-section of a multidimensional sustainability transition and are collectively exploring overlapping themes, including grid innovation, circularity and land renewal.

For example, Schnitzer Steel acquires, processes and recycles millions of tons of scrap metal every year, while third-ranked company Brambles leverages a share and reuse model to manage a network of reusable pallets, crates and containers.

Schnitzer Steel CEO Tamara Lundgren comments that global climate commitments are requiring companies and countries to better understand the environmental impacts of their supply chains and to seek out the most sustainable materials available to achieve their carbon reduction targets, as well as advance the circular economy.

“Executing our sustainability strategy by reducing our environmental impact and developing solutions for our customers and suppliers to do the same reinforces our role as a responsible neighbour and steward in the communities in which we operate,” she adds.

The Global 100 Most Sustainable Corporations have a combined market value of $7.3-trillion and are about 33 times more carbon efficient than their MSCI ACWI peers. About 80 of the 100 companies implement CEO sustainability pay links.

One area where the sustainable firms do not outperform the blue-chip benchmark is the ratio of taxes paid, where these firms are neck-and-neck with ACWI firms. Similarly, ACWI firms have a slightly lower CEO-to-average-worker pay ratio and are catching up in terms of gender diversity among executives and board members.

Corporate Knights explains that while the Global 100 Most Sustainable Corporation ranking focuses on highlighting the world’s most sustainable companies, progress across the broader universe denotes undercurrents of change, as the transition to a sustainable economy accelerates.

“While a degree of competition incentivises innovation among the Global 100 Most Sustainable Corporations, these companies ultimately exist within an ecosystem of businesses working to advance a shared vision.

“If anything, the ranking highlights the abundance of opportunity and reward that exists for corporations willing to authentically adopt sustainable business practices. There is room at the top for many more.

“In the meantime, the top sustainable companies are paving the way for a new generation of sustainability leaders,” says Corporate Knights CEO and co-founder Toby Heaps.

The top 20 most sustainable companies on the index are located in the US, Denmark, Australia, Bermuda, Canada, France, Spain, Taiwan, China, Brazil, Ireland and Finland.