I’m skeptical about efforts to rank and rate green or sustainable companies, and I have been for a time. [See 100 Best Corporate Citizens? What a CROck!] It’s terribly difficult to compare big and small companies, retailers with manufacturers, software firms with oil companies, etc. We once tried at FORTUNE, and gave up because we decided it couldn’t be done right.

Having said that, I’m impressed with the rigor and methodology used by a Canadian magazine called Corporate Knights to produce its 8th annual list of Global 100 Most Sustainable Companies, which it calls “the most extensive data-driven corporate sustainability assessment in existence.” The ratings are transparent and they encompass social as well as environmental metrics, among them energy, carbon, waste and water productivity, diversity and employee turnover, safety and, interestingly, the ratio between CEO and average worker pay–a revealing metric that most such rankings do not include. Disclousre: While I played no part in putting the list together, I did write a profile of Novo Nordisk, the top-ranked company, for Corporate Knights.

A couple of things to note about the list. First, US companies perform poorly. There’s not one US-based company in the top 10. Intel (No. 18) Life Technologies (No. 15) is the highest ranked US-based firm, followed by Intel (18), Agilent (59), Johnson Controls (64), Procter & Gamble (66) and IBM (69). Lest you suspect a Canadian bias, our neighbors to the north did no better. The top-ranked Canadian firm was Suncor (48), which calls itself an “oil sands pioneer. Go figure.

Of the 22 countries with companies that made the list,  the UK led the way with 16 Global 100 companies, followed by Japan with 11 and France and the US with eight. Northern European countries (Denmark, Netherlands, Norway, Sweden) punched above their weight, which isn’t surprising.

Interestingly, these more sustainable companies have outperformed their peers. Toby Heaps, CEO of Corporate Knights, said in a news release: “In a year in which Wall Street was occupied and capitalism became a bad word, the Global 100 companies serve as ambassadors for a better, cleaner kind of capitalism which, it also turns out, is more profitable.” The magazine reported:

From its inception on February 1 2005 to December 31, 2011, the Global 100 Most Sustainable Corporations has achieved a total return of 41.70%, outperforming its benchmark, (the MSCI All Country World Index at 29.30%) by more than 11%.

How did Novo Nordisk reach the top? According to Corporate Knights, the Danish pharmaceutical firm

is on record that access to essential medicines is a human right, and sells human insulin (the most basic kind) to 33 of the world’s poorest countries, at no more than 20 per cent of the average price in the western world. On the key clean capitalism metrics measured by Corporate Knights, Novo Nordisk scored top quartile performance in energy productivity ($4,851 in revenue generated per unit of energy consumption, compared to a pharmaceutical sector average of $3,603), carbon productivity ($68,585 in revenue generated per unit of carbon emitted, compared to a pharmaceutical sector average of $56,414) and pay equity (CEO/average employee remuneration ratio of 15 vs. a pharmaceutical sector average of 93). Novo Nordisk is the only pharmaceutical company within the Global 100 to report linking CEO remuneration to corporate performance on clean capitalism KPIs.

What impressed me about Novo Nordisk was how deeply sustainability issues are woven into the fabric of the company. In my story, I write about the firm’s approach to drug pricing, to climate and energy issues and to China. Here’s how the story begins:

Don’t ask Novo Nordisk for the company’s corporate responsibility report. The Danish pharmaceutical firm, which had revenues of DKK 60.7 billion (US$10.5 billion) in 2010, doesn’t publish one. Instead, Novo Nordisk reports on its environmental and social performance – including water and energy consumption, waste reduction, employee turnover, the diversity of its management team, new patent filings and charitable donations – alongside its financial performance in a single annual report.

This integrated approach to reporting reflects the way business is done at Novo Nordisk, the world leader in diabetes care and the No. 1 firm on the 2012 list of Corporate Knights Global 100 Most Sustainable Corporations. Novo Nordisk has pursued a triple bottom line of financial, social and environmental gains since the 1990s, when the phrase was coined by writer John Elkington, and it incorporated the concept into the company’s legal structure nearly a decade ago.

“The main foundation for Novo Nordisk is the triple bottom line because that is what’s protecting our license to operate,” says Lars Rebien Sorensen, the firm’s president and CEO. “That begs and obliges everybody in the company not only to see that we become a good business – that’s the financial bottom line – but that we do so in a way that is socially and environmentally responsible.”

Lise Kingo, who has worked on sustainability issues since joining Novo Nordisk in 1988, says the company’s business case for corporate responsibility goes well beyond protecting its license to operate. Today, she says, the firm envisions sustainability as a way to drive innovation, and finds that engaging with stakeholders helps spot business opportunities as well as avert trouble. One sign of the value that the company places on sustainability is the fact that Kingo, 50, has been part of Novo Nordisk’s five-person executive management team since 2002.

You can read the rest here.

And, speaking of rankings, I was pleased once again to be named to the Ethisphere Institute’s 100 Most Influential People in Business Ethics. Lists are fun so long as we don’t take them too seriously. (Really, how do you compare the influence of federal prosecutor Preet Bharara, Russian blogger Alexei Navalny and Walmart CEO Mike Duke, all of whom are in the top 15?) Still, some of the business people on the list whose work I know certainly deserve to be spotlighted, including Starbucks’ Howard Schultz, Coca-Cola CEO Muhtar Kent, Jeffrey Swartz of Timberland, Brian Dunn of Best Buy, Yalmaz Siddiqui of Office Depot and Bob Corcoran of GE. I was also thrilled to see my friend Liz Maw, the executive director of Net Impact (where I’m on the board), be recognized for the great work that she, her staff and the organization are doing.

I’m not much for patriotic displays, but I’m proud to wear this red, white and blue wristband inscribed with the word INDIVISIBLE.

I hope you’ll wear one, too. They’re available, beginning Tuesday, at Starbucks, for a donation of $5 or more to a project called Let’s Create Jobs for USA.

The program aims to create thousands of jobs across the country, by investing community development financial institutions (CDFIs) — mostly credit unions and community banks — that will then lend to small businesses, nonprofits, housing and commercial developers, micro-enterprises and the like, all to spark the economy and create jobs.

I’m a fan of this project,  for several reasons.

First, there’s no more front-of-mind issue in America today than jobs. So this a great example of how a big company can help tackle an important  problem–while enhancing its reputation as a business that supports its communities.

Second, Let’s Create Jobs for USA underscores the fact that, despite the rhetoric from politicians, jobs are best created by the private sector.  If you’re anti-business, you’re anti-jobs.

Ben Packard

Third, although credit for the campaign ultimately belongs to Howard Schultz, Starbucks CEO, Let’s Create Jobs for USA unfolded as it did because of a connection between Ben Packard, vice president of global responsibility at Starbucks and Mark Pinsky, president and CEO of the Opportunity Finance Network, a national network of CDFIs. Ben, Mark and I serve together on the board of Net Impact, a great organization of students and young professionals whose purpose is to inspire and equip young people to use the power of business to make the world a better place.

Let’s Create Jobs for USA is very much in the spirit of Net Impact.

I chatted about the program with Ben and Mark this weekend during Net Impact’s annual conference in Portland, Oregon.  Ben told me the idea grew out of a long-running loan program for farmers that Starbucks supports in coffee-growing countries. Last year alone, Starbucks made loans to 56,000 farmers in 10 countries; the company has promised to make $20 million in loans by 2015.

Mark Pinsky

With the US economy reeling last summer, Schultz wondered out loud whether Starbucks could do for its retail communities in the U.S. something comparable to what it does in coffee-growing regions. The company needed a partner, and so Ben recommended Mark, an indefatigable expert on community development and finance. (Ben hastens to add that after making the connection, he stepped aside, and work on the project was done by others at Starbucks.)  Through Opportunity Finance Network, Mark and his team can get the money raised at Starbucks into low-income communities quickly and with little or no red tape. Through its foundation, Starbucks donated $5 million to Opportunity Finance Network to get things rolling.

“That money will get out and it will get out right away,” Mark told me. “CDFIs have been lending in the past few years, and at a pace faster than traditional financial institutions.”

CDFIs have been around for decades. Many, in fact, get support from the much-maligned Wall Street banks, as well as the U.S. Treasury. But their lending has been constrained by a shortage of capital. Money raised by Let’s Create Jobs for USA will go to meet their capital requirements, enabling the impact of the donations to multiply. “Every dollar that gets donated will enable $7 in new financing,” Mark said. Loans support business ranging from local grocery stores to charter schools to affordable housing, all aimed at serving the poor and working class.

Schultz and La Russa show their wristbands

The effort crosses party lines. “Howard (Schultz) gave a wristband to President Obama, and he gave one to Tony La Russa,” said Mark. La Russa, as you may know, has Tea Party sympathies (see this and this) but that didn’t stop him from wearing an “indivisible” wristband during game seven of the World Serious.

The speed with which all this came together is breathtaking. Mark visited Starbucks HQ in Seattle in early September. The program was announced in early October, and it rolls out to 7,000 Starbucks stores and online on Tuesday. Many big companies would need a month or two just to run an idea like this past their lawyers.

The payback to Starbucks will come in the form of an enhanced reputation and, in the long run, healthier communities. People without jobs don’t spend $3 for a grande latte.

“This is about using our scale for good,” Schultz said.

Nice to see a CEO stand up for the 99%.

Aron Cramer

Today, I’m pleased to publish the first in a series of guest posts from Aron Cramer, the president and CEO of BSR. BSR (formerly Business for Social Responsibility) works with its 250 member companies to promote a more just and sustainable world, through research, consulting and industry collaborations. Aron, who’s a longtime colleague and friend, has worked all over the world on business issues ranging from labor rights in global supply chains to Internet freedoms in China to the meaning of “sustainable consumption.” Here, looking ahead to BSR’s 2011 conference in San Francisco, he writes about the need for business leaders to step outside the boundaries of their companies to re-energize the sustainability agenda.

Most years, people are reluctant to see summer fade into fall. But the summer of 2011 was a bit of a bummer, bringing hurricanes and earthquakes in the American Northeast; ongoing political stagnation in the United States, Europe, and Japan; and signs that the world’s mature economies are stuck in neutral—and may remain that way for some time. Leaving this summer behind feels like a relief.

It’s up to business to turn things around. That’s why BSR has made redefining leadership as the theme of the BSR Conference 2011.

We view this opportunity as having four dimensions, which we outlined in our most recent annual report. In this series of blog posts, I want to elaborate on each one, beginning with the need for business leaders to invest in the infrastructure required for sustainability.

Building the infrastructure for sustainability goes far beyond green buildings. It means advocating for systemic solutions that create the right incentives for business to make progress on crucial issues like human rights and climate change. Making this happen requires a different kind of engagement in public policy.

These solutions fall into three categories: changing the rules that guide companies, reorienting governments to embrace a sustainability agenda and galvanizing the public. This is not the usual checklist for business. But with policymakers paralyzed by the current economic crisis, both the public and business need to help change the policy agenda.

How to change the rules to reward companies that take sustainability seriously? We can start by supporting stock-exchange listing requirements that make medium- and long-term questions as an explicit part of fiduciary duty. Efforts like this are underway from South Africa, where companies are required to report on their sustainability work, to Sacramento, where California’s legislature is considering a “flexible purpose corporation,” which explicitly enables companies to consider long-term impacts. Globally, the work of the International Integrated Reporting Committee (on which I serve), which is developing a model that brings sustainability into financial reporting, holds out the prospect of further mainstreaming.

Second, we should do what we can to ensure that, within the existing rules, governments advance a sustainable growth agenda. The highest-profile vehicle for this is the Rio+20 summit next June. Many governments, including the United States, have grown very timid on climate action since Copenhagen. This makes it even more important for business to work through groups such as Business Action for Sustainable Development to push and prod government to limit climate change and promote a green growth agenda. Companies like Nike are taking this responsibility seriously. The company has been a strong advocate for public policies that shift our energy system to a lower-carbon model, through BICEP and other entities. Nike has also demonstrated its commitment by creating a unit within its sustainability team that is dedicated to “mobilizing” other actors to realize its vision.

Third, business should exercise its voice, which is too often muted or expressed through trade associations’ efforts to block policies that embrace social and environmental progress. Just this week, the White House, allegedly responding to business pressure, withdrew implementation of new air pollution regulations. Pressure is intensifying to take other steps like this, in the name of restarting a stalled economy.

Starbucks’ Howard Schultz is an example of a chief executive who is taking a different approach, and aiming to be a statesman. His recent effort to halt contributions to political candidates, while not explicitly tied to sustainability, demonstrates how business leaders can influence public debates. Other business executives, like Jim Rogers of Duke Energy and Lars Josefsson of Vattenfall, have also spoken out about the need for governments to act to promote clean energy. With public support for sustainability flagging amid severe economic doldrums, business leaders have the obligation to argue on behalf of environmental protection. The bully pulpit is not just for presidents and prime ministers.

In times of economic difficulty, it’s tempting to put off investments in a sustainable future. Our times require business leaders to think not only about their own performance, but also about the robustness of the systems in which they operate. Those systems are sputtering right now. We as business must reshape the rules, reorient the system, and rebuild public support for sustainability.

Judging by the number of books about business and the environment piling up on my shelves, the corporate sustainability movement is alive and well.

One of the best is Business Lessons from a Radical Industrialist by Ray Anderson, the founder and chairman of the commercial carpet company Interface.

I’ve been provided with two signed copes of the paperback edition to give away. I’m expecting a signed copy of Howard Schultz’s book, which I’m also going to give to a blog reader. More on that, in a moment.

But first, a few thoughts about Ray and his book. Ray is a terrific guy who has had a great influence on business people across America, by tirelessly promoting the idea that a truly sustainable approach to business  is good for business. (See my 2009 interview, Ray Anderson, Radical Industrialist.) “Take nothing from the earth that cannot be replaced by the earth” is how he puts it.

Fifteen years after setting that goal for Interface, the company has cut its greenhouse gas emissions by 94 percent, cut fossil fuel consumption by 60 percent, cut waste by 80 percent, increased sales, doubled earnings and re-invented the way carpets are made, sold and recycled.

Says environmental activist Bill McKibben: “Ray Anderson is a hero.”

A soft-spoken, genial Georgian, Ray, who is in his late 70s, can’t get out to promote the paperback edition because, as he writes in a new foreword: “I have spent the last year dealing with cancer, thankfully holding my own–barely.”

He can’t help but draw analogies between his own experience with disease and environmental pollution. Neither his father, who was one of seven siblings, nor his mother, who was also one of seven, nor any of their brothers and sisters had cancer. But he and and his two brothers have had the disease. Could it be something in the environment? Hard to say.

But Ray writes:

Irresponsible business–the diggers, the drillers, the processors of poison, all of whom ought to know better–they and their abusive industries–are a cancer on society.

…It is high time we all started on the right treatment of this disease before it takes us all down.

Strong words, to be sure, but coming from a CEO and businessman with his own inspiring story, they resonate.

Interestingly, I’ve found that the best books about business and sustainability are written by CEOs and insiders, and not by journalists or consultants. My personal favorites include Natural Capitalism by Paul Hawken, Amory Lovins and Hunter Lovins, Stirring it Up by Gary Hirshberg and What Matters Most by Jeff Hollender and Stephen Fenichell.  I liked Howard Schultz’s first book, Pour Your Heart Into It, a lot, although it’s less about the environment and more broadly about doing business right. Jim Collins’ work, especially on leadership in Good to Great, has had a big influence on my thinking. My friend Barbara Waugh’s The Soul in a Computer is another inspiring read.

What about you? Which books about business, values and sustainability have influenced you most? I invite you to nominate a favorite or two in the comments below or, if you prefer, email me at marc.gunther@gmail.com. I’ll do a blogpost in the next week or so highlighting some of the nominations. Here’s a Top 10 list I found online to get you thinking.

I’ll send my two signed copies of Ray Anderson’s book and my  copy of Howard Schultz’s Onward (assuming it arrives soon) out to those who sent in the most interesting or original nominations. Ancient as well as contemporary wisdom is welcome.

I’ve also decided to reduce my pile of books (below) by sending them to people who write guest posts to this blog, so if you’re passionate about a corporate sustainability issue, please let me know if you like to contribute a post.

Seattle surely has more coffee shops per capita than any American city, so the arrival of another one would ordinarily not get much attention. But a newly-renovated coffee shop called 15th Avenue Coffee and Tea in the city’s Capitol Hill neighborhood is attracting interest—because it’s a Starbucks in disguise.

YOUR neighborhood coffeeshop is a Starbucks!

Crazy as it sounds, Starbucks, which has its headquarters in Seattle, operates 16,000 stores around the world and has spent countless millions to build its brand, is going undercover.

15th Avenue Coffee and Tea, which used to be a Starbucks, is one of several stores in the Seattle area that will be un-branded, as a way to see whether the chain might do better by adopting what a company executive called “a community personality.”

“This one is definitely a little neighborhood coffee shop,” said Tim Pfeiffer, senior vice president of global design at Starbucks, according to the Seattle Times.

You can imagine where this unbranding campaign could lead. A little neighborhood burger place run by McDonald’s? A little neighborhood hardware store owned by Home Depot? A little neighborhood five-and-dime operated by Wal-Mart?

Visiting Seattle the other day, I trekked up to Capitol Hill to check out the new store. Alas, it’s not going to open until this week. But the city’s newspapers are reporting that all traces of the Starbucks brand or logo will be erased from 15th Avenue Coffee and Tea.

Transparency? Authenticity? Aw, never mind.

Here’s how a company spokeswoman explained it to SeattlePi.com:

We’re continuing our commitment to delivering specialty coffee excellence while refreshing our store design approach with amplified focus on local relevance. Ultimately, we hope customers will feel an enhanced sense of community and a deeper connection to our coffee heritage.

Those, my friends, are words only a corporate PR person could utter. Any resemblance to spoken English is purely coincidental.

To be sure, Starbucks is responding to strain of public opinion that says local is better than global, small is better than big and independent is better than chain-owned. I’ve never been much persuaded by this line of thinking, if indeed it is thinking. The primary reason why Barnes & Noble hurt some but not all independent bookstores is that it offered a bigger selection in a more pleasant environment. But there’s no doubt that the small-is-beautiful bias is out there. The morning that I visited 15th Avenue Coffee and Tea (and I’m not making this up), I walked by a young woman wearing a T-shirt with a fake Starbucks logo that said “Corporate Coffee Sucks.” It’s possible that Starbucks’ “amplified focus on local relevance” will turn her into an ally, but somehow I don’t think so.

I’m actually a big fan of Starbucks. The company’s coffee-buying practices are admirable. Starbucks has worked hard to develop more environmentally-friendly packaging (as the Environmental Defense Fund has said). And of course CEO Howard Schultz has won deserved praise for providing health-care benefits and stock options to even part-time employees.
While Starbucks has been accused of destroying independent coffee houses, the opposite is true: The company transformed a commodity into a premium product, taught millions of Americans to spend $3 (or more) for lattes and cappuccinos, and thus spurred the growth of the specialty coffee industry.

Now, because Starbucks is suffering after years of hyper-growth, you can’t blame the company for trying new approaches, or copying others. (Owners of three independent coffee shops in Seattle report that Starbucks’ employees have been visiting their stores and taking notes, with some carrying folders labeled “Observation.”) The new unbranded neighborhood stores will “serve wine and beer, host live music and poetry readings and sell espresso from a manual machine rather than the automated type found in most Starbucks stores,” the Seattle Times reports.

But I wonder if the people running Starbucks are overcomplicating it business. The company grew too fast and lost focus (dabbling in music and movies) and so quality suffered—particularly the quality of store managers and baristas. I frequent three Starbucks near my home in Bethesda, Md. One is unfailingly clean and pleasant, with baristas who appear happy to be there. A second offers spotty service and décor. A third is predictably subpar—and often empty.

Starbucks will come back. It’s a great company with a great brand, and it doesn’t hurt that its core product happens to be addicting. Why go into hiding?