The Global 100 Index is a ranking of the world's most sustainable corporations. The list is compiled by Toronto-based media and investment advisory firm, Corporate Knights (CK).
Contents
Each year, the latest iteration of the index is announced at the World Economic Forum in Davos, Switzerland.
As at December 31, 2013 the Global 100 has outperformed its benchmark, the MSCI All Country World Index by 3.21%.
History
The Global 100 was created by Corporate Knights Magazine in 2005. The goal of creating the index was to devise a methodology to quantitatively compare and rank the world’s largest public companies.
Methodology
The Global 100 uses a purely quantitative methodology to determine inclusion in the ranking. The Global 100 starting universe automatically considers all firms with a market capitalization of at least US$2 billion. The firms are then put through numerous screenings to test for key information, including; overall sustainability disclosure rate and sustainability disclosure rate versus GICS sector peers, a financially based Piotroski F-score to ensure financial stability, and fines, penalties or settlements paid out by the company for sustainability related violations. Companies in the GICS sub-industry categories of tobacco and those engaged primarily in defence are eliminated.
The initial screening process culminates in the Global 100 shortlist. At this point, companies are compared on priority key performance indicators (KPIs), according to GICS sector. Priority indicators are chosen based on the percentage of firms in the sector who disclose the indicator. If less than 10% disclose, than the indicator will not be considered a priority KPI for that sector. There are a maximum of 12 KPIs used in the ranking, they are:
Each KPI is weighted equally and companies are given an overall percentage score. Failure to disclose a priority KPI will result in a zero, thus severally punishing firms for non-disclosure.
Accolades
The Global 100 Index has been recognized as a leader in transparency and industry best practices for sustainability rankings, according to SustainAbility’s Rate the Raters project.