Sustainability Stock Index Firms Beat Overall Market
Ford, General Electric, Intel, Hewlett-Packard and Campbell Soup are among the companies listed on a stock index of sustainability leaders launched by the UN Global Compact that shows a total investment return of 26.4 percent during the past year, surpassing the general global stock market.
The GC 100, released in partnership with research firm Sustainalytics, is composed of a representative group of Global Compact companies selected based on their adherence to the 10 principles, which cover topics including labor, human rights and the environment, as well as evidence of executive leadership commitment and consistent base-line profitability.
The GC 100 tracked the stock market performance of these companies during the past three years, comparing the results against a broad market benchmark, the FTSE All World. The data for total returns is as follows:
GC 100 rose 26.4 percent during past one year; FTSE All World rose 22.1 percent
GC 100 rose 19 percent during past two years; FTSE All World rose 17.7 percent
GC 100 rose 12 percent during past three years; FTSE All World rose 12 percent
Georg Kell, executive director the UN Global Compact, says based on the performance of the GC, there “appears to be an exciting correlation” between corporate sustainability practices and stock performance. The results may also reflect the fact that investors are paying more attention to firms’ sustainability performance.
Sustainalytics carried out the research in constructing the GC 100, using a proprietary methodology that takes into consideration a range of indicators based on the Global Compact’s 10 principles. In creating the index, Sustainalytics only evaluated those Global Compact signatories that are currently covered in its research universe: approximately 722 companies in total. (The Global Compact today includes almost 8,000 corporate signatories, of which approximately 1,000 are publicly traded companies.)