The Top 3 in 2005

The three companies singled out for superior sustainability excellence had the highest Innovest scores and ratings overall. What makes these three companies stand out is their ability to manage strategic profit opportunities. That is, their ability to profit from recognizing new environmental and social markets.

 

TOYOTA

The automotive transportation sector has significant environmental impacts, especially with respect to climate change. Toyota Motors has developed and successfully commercialized the marquee environmental technology of the decade for the industry, the hybrid drive vehicle. Its Prius model was the fastest selling car in America in 2004 and the company is doubling production in 2005 due to strong demand. Toyota is also licencing some of the technology to Ford Motor for its hybrid vehicles, thereby vastly expanding the positive impact this technology has made on the automotive sector. Additionally, Toyota has made a strong commitment to environmental management at its facilities and has engaged its suppliers in an effort to improve the eco-efficiency of its operations throughout the value chain.

 

ALCOA

All companies in the metals and mining sector face significant sustainability-related challenges. However, Alcoa has distinguished itself as a leader through its sophisticated approach to identifying and managing the material sustainability risks that it faces as a company. From greenhouse gas emissions reduction programs to engaging stakeholders over controversial hydropower projects, Alcoa has the requisite sustainability strategies in place to meld its profitability objectives with society's larger goals of environmental protection, wealth creation and social stability. In fact, Alcoa has found ways to make money in the process: the company expects its efforts to create environmental and energy cost savings of $100 million by 2006.

Importantly, Alcoa's approach to sustainability is firmly rooted in the idea that sustainability programs can indeed add financial value. This approach is perhaps best evidenced by the company's efforts to promote the use of aluminum in transportation applications, where aluminum - by nature of its excellent strength-to-weight ratio - is making inroads as a material of choice that allows automakers to build low-weight, fuel efficient vehicles that produce fewer tailpipe emissions. This kind of forward-thinking strategy of supplying the market with the products that will help solve pressing global environmental problems is indicative of a company that sees the future, has plotted a course, and is aligning its business accordingly.

 

BP

In the O&G industry, BP is on the leading edge on overall sustainability excellence. Corporate social and environmental strategies are strong in practically all areas of intangible value creation in relation relative to peers. Currently, the company is further consolidating sustainability and governance efforts across worldwide operations. BP has demonstrated leadership in resource and energy efficiency, climate change risk abatement, waste reduction and recycling, and overall environmental impact minimization. Some relevant initiatives include participation in emissions trading, development of a world-leading solar power business, a shift towards natural gas from oil, a goal of zero impact in upstream operations, and the provision of clean/low emissions vehicle fuels at retail outlets.

Additionally, BP has implemented a global social policy backed up by programs and initiatives comprising ethics, transparency, employee responsiveness, stakeholder relations and H&S. Corporate social commitments extends into procurement, local communities, customer interface, and other business relationships. Also, to measure performance on a wide set of environmental and social goals, BP has implemented a wide set of indicators, some of them are site specific.

Having a vision of transforming these investments and initiatives into strategic profit opportunities, BP has invested in developing business lines focusing on three areas: renewable energy technology (fuel cells, wind energy, and photovoltaic); low-environmental impact products; and cross-industry R&D partnerships for new product development and commercialization. By investing in strategies that go beyond sustainability risk minimization, BP has gained know-how and competitive advantage in new business areas created by a near-future business environment characterized by a carbon-constrained market place, continuously tightening environmental regulations for the O&G industry, and increased corporate governance scrutiny.