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Puma takes bite out of Apple to head ethical business list

May 3, 2012 -- Updated 0207 GMT (1007 HKT)
Best foot forward: German leisure apparel company Puma heads the pack in in a new sustainable business report.
Best foot forward: German leisure apparel company Puma heads the pack in in a new sustainable business report.
STORY HIGHLIGHTS
  • Report graded over 2,000 top companies for sustainability
  • Apple and Google received D grades
  • German sportswear company Puma was rated highest
  • Only 2% of U.S. companies and 1% of Asian businesses had the top mark

(CNN) -- Tech giants Apple and Google may get an unofficial A grade when it comes to stock price, but they can only manage a D grade when it comes to sustainability.

The U.S. technology companies both received the grade that would make most students wince in a new survey, published this week, that rated the sustainability performance of 2,063 global companies.

The report evaluated companies according to their social, environmental and governance risks and impacts, taking into consideration human rights and supply chain labor standards among other issues

Top of the class in the Sustainability Report published by EIRIS, the British based corporate research company, is German sportswear company, Puma. Lesser known companies like Danish pharmaceutical company, Novo Nordisk, and two British rail and bus companies make it into the top ten.

Top ten ethical companies
1: Puma, German sportswear company

2: FirstGroup, British rail and bus company.

3: National Australia Bank

4: GlaxoSmithKline, British pharmaceuticals company

5: Roche, Swiss pharmaceutical company

6: Novartis, Swiss pharmaceutical company

7: Philips Electronics, Dutch electronics company

8: Deutsche Börse, the German stock exchange

9: Novo Nordisk, Danish pharmaceutical company

10: Go-Ahead Group, the UK bus and train company

Rated by EIRIS Sustainability Report

Puma CEO explains his company's business model

"Despite operating in a sector at high risk for human-rights abuses, Puma has a strong environment record and demonstrates improvements in supply chain labor standards," the report said.

The worst performers were graded E, with over 60% of mining and oil and gas producing companies including ExxonMobil and Chevron Corporation given the lowest rating.

By definition fossil fuel focused companies are not able get the highest grade, but the report's authors say their grades can improve if they show greater commitment to developing cleaner alternative energy sources.

The sector with the most A grades was in health care, because of the "positive social benefits of healthcare" and lower environmental impact, with four pharmaceutical companies in the top ten.

Carlota Garcia-Manas, Head of Research at EIRIS, said environmental and ethical concerns are becoming a greater priority among many of the companies rated.

"There are signs that companies are making sustainability a priority and acknowledging its importance, not only in terms of acting as good 'corporate citizens' but also in terms of ensuring their own long-term success," she said.

The report revealed some notable differences between companies from different regions. One fifth of UK companies scored A, followed by 12% of mainland European ones, but only 2% of U.S. companies and 1% of Asian ones received the top mark. One in five of the Asian companies surveyed received an E grade.

According to EIRIS, Apple's poor grade was because of its links to suppliers in countries with human rights and labor issues, while another of titan of the corporate world, Toyota, received a C because of its leadership in developing cleaner technology vehicles.

Learn more: Apple's tax tricks

The report found that smaller companies were generally lagging behind on sustainability -- only 24% of the 50 biggest companies surveyed had D or E grades compared to 40% across the wider sample.

"It's clear that companies need to do much more if they are to meet the concerns of their stakeholders and investors whilst managing the impacts of their businesses upon society and the environment in a sustainable way, both now and in the future," said Garcia-Manas.

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