Feb 2

New ESG Rankings Produce Surprise Wins for Heavy Industry

Stephen Bierman
Oct 19, 2020

Image: Stanislav Kondratiev via Unsplash

Heavy-industry players are leading the Wall Street Journal’s newest rating of the top 100 most sustainably-managed companies, in a reflection of a turn among global heavy-industry corporates towards a serious embrace of ESG.

The WSJ named Turkish steel maker Ereğli Demir & Çelik Fabrikaları TAS as the top company to “manage the most financially significant environmental risks effectively.” The ranking by one of the leading financial publications in the United States assumes that heavy goods, like steel, will continue to be a backbone of society and economic growth, and sought to find the area where corporates made the most progress. This would explain the surprise of finding two metals companies atop a leading environmental sustainability list.

The Turkish company’s efforts at sustainability impressed the WSJ, as the company clinched a $136 million loan from the European Bank of Reconstruction and Development that helped it continue to improve energy efficiency and cut emissions.

Russia’s London-listed Evraz nabbed the second spot after investing more than $174 million to cut emissions and boost energy efficiency on-site, according to the Journal’s report. Evraz switched from burning coal to burning waste for power as well as recycling more waste from its iron and steel production.

The methodology is a welcome new look, as Evraz had not been considered as the top ESG corporate in its native Russia, where heavy-industry players are also topping corporate sustainability lists.

The nation’s top business lobby, the Russian Union of Industrialists and Entrepreneurs (RUIE), recently chose fertilizer company PhosAgro as the first-ever two-time winner of its ESG Grand Prix at the Russian Business Leaders Awards. The award serves as “the highest recognition of sustainable business practices in Russian business.” PhosAgro – which is one of 41 corporate global sustainability leaders taking part in the UN Global Compact LEAD programme – carried the day with its social spending projects and environmentally friendly fertilizers that prevent the contamination of soils with heavy metals.

Meanwhile, Forbes led its report on the most sustainable companies of 2020 with Danish-based renewable power producer Ørsted. The electricity producer has steadily divested fossil fuels and invested into clean offshore wind power, according to Forbes. The company seeks to be coal-free by 2023, while its offshore wind farms already bring power to more than 13 million people.

So who is the number-one company for ESG? In these early stages of rating and strategy development, that question seems a little beside the point. The existing various methodologies mainly prove that there are going to be many ways, specific to industry and geography, to measure leadership in ESG. The most encouraging thing is that the adoption of social and environmental best practices is being done – and is being taken seriously – by leading industry players around the world.

Stephen Bierman

Stephen Bierman is a finance and energy reporter with over 15 years of experience, including at Bloomberg News and Energy Intelligence.

Tweets at: @StephenBierman1

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