Personally, I have found that many climate activists are quick to poo poo the efforts of major conglomerates to combat climate crisis. However, the impact potential for a company in the Fortune 500 can rival that of a major world city. There is no sustainable future without the corporate world coming along for the ride. That’s why diving into companies with sustainability reports is so important – these frontrunners are paving the way for what change will look like in the coming years.
These companies that are committed to sustainable practices often use renewable energy sources, recycle materials, and reduce waste. They also try to minimize their impact on the environment by reducing pollution and conserving natural resources. Many are taking the initiative to build out circular economy strategies.
Companies with Sustainability Reports Are The Future
Unfortunately, many companies claim to be committed to these practices, but hide away from transparency. Below you’ll find 3 companies that are publicly traded and showcasing their commitment to sustainability with reporting.
I’ll also cover what I learned reading through these reports and leave you to decide if these are stocks you want to include in your portfolio. I don’t invest in individual stocks, I approach investing through ETFs. While any given fund can contain thousands of stocks, I find it helpful to dive deep on major holdings within ESG funds to ensure I feel good about my investments. I hope the below helps you find the right ESG investments for your goals.
Nike Sustainability
Nike has made sustainability an integral part of its business model since 2003 and has been voluntarily issuing reports since 2005. It has also become one of the world’s largest corporate purchasers of renewable energy.
More recently, Nike set 29 purpose targets that they intend to hit by 2025. In the targets they call out that Nike has the climate impact of a global city. I find that fact mind bending – for Nike to set these targets, it could be commensurate with Amsterdam doing the same thing.
The sustainability targets that Nike has set include things like 10X the quantity of used goods that are recycled or refurbished, a 70% reduction in greenhouse gas emissions, and increasing the use of recycled goods used to make products. To date they report pulling 112 millions tons of plastic out of landfills and waterways to create their Tempo Short.
Also worth noting, Nike is no stranger to impact reporting. They were a trailblazer for companies with sustainability reports when they began reporting on environmental and social impact in 2002. That report focused on workforce diversity – before it was cool to do so.
Sustainability at Nike According to Their FY21 Impact Report
As someone who has worked in reporting for a good chunk of my career, it always gives me pause when I see a report filled with green arrows points up. No project or initiative is perfect, so what’s not being reported on when the numbers are saying that everything is coming up roses?
However, what I love about this report is that it gives absolute totals. I ran total GHG (greenhouse gases) emissions through a convertor and learned that Nike’s total owned and operated emissions, 119,141 metric tons of GHGs, is equivalent to 13.5M gallons of gas consumed in a year.
This isn’t exactly a flattering number. That being said, I believe it’s important to focus on progress over perfection, otherwise we’ll never move forward at all. In that spirit, Nike has been able to reduce their GHGs by 43%. I think it’s worth celebrating and supporting a company that has reduced the equivalent of about 10M gallons of gas from their production process.
You can find the entire Nike FY21 Impact report here.
Apple Sustainability
Apple has been at the forefront of environmental responsibility since its inception. In fact, the company was one of the first major tech companies to make an effort to protect the environment. It began with recycling efforts and later expanded into renewable energy production. Today, Apple uses 100% renewable energy for its operations and has been carbon neutral since 2020. Apple also has committed to making all of its products carbon neutral by 2030.
This is an important distinction that many companies aren’t willing to call out. It’s one thing for a company to be environmentally friendly, it’s another for its entire supply chain to be so. This makes Apple a trailblazer for companies with sustainability reports.
For example, Ford Motor Company could (but hasn’t) go totally carbon neutral, but they’re major suppliers – battery, seat, window makers, etc. – could still be filthying up the planets with abandon. We as the consumer would hear only that Ford is carbon neutral and think we could feel good about buying a battery operated F150, without knowing the full story.
Sustainability at Apple According to Their 2022 Progress Report
The Apple Sustainability Progress Report focuses on three key areas for Apple:
- Climate change, focused on carbon neutrality, GHG reduction, and renewable energy use
- Resources, which includes a circular strategy, as well as a reduction of plastics and water usage
- Smarter chemistry, which includes reporting, innovation, and harm reduction to humans and the environment
This 128 page report is incredibly comprehensive and the level of detail Apple dives into does give me a sense of trust in their willingness to disclose what’s happening.
Again, it’s a kumbaya report, just like Nike’s. I don’t expect a company to call out where they’ve failed, but it would lend itself to credibility around self-reporting.
The good news is though that Apple is accomplishing some pretty incredible feats in reducing their carbon footprint. Highlights include:
- Year over year reporting that showcases a reduction in emissions since 2017 despite massive company growth.
- 23M metric tons of emissions avoided in fiscal year 2021 alone due to carbon reduction initiatives across the value chain.
- 213 suppliers committed to 100% renewable electricity for Apple production, representing the majority of Apple’s direct worldwide spend for materials, manufacturing, and assembly of products
Personally, I think that last bullet point is an enormous gain. Moving suppliers to 100% renewable energy means that the effects are exponential, with those supplier’s other clients also becoming greener as a result.
You can find the entire Apple 2022 Sustainability Progress Report here.
Starbucks Sustainability
Starbucks was founded in 1971 as a small coffee shop in Seattle. Today, it operates more than 28,000 stores worldwide and employs nearly 200,000 people. Its mission statement includes “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.”
Starbucks is one of the largest coffee retailers in the world. It’s been recognized as an environmentally friendly company by the United Nations Environment Program (UNEP) since 2007. In fact, the company was named “Best Green Business” by Newsweek magazine in 2009.
Starbucks is also the first company with sustainability reports. They voluntarily issued an impact report, all the way back in 2001.
Sustainability at Starbucks According to Their 2021 Global Environmental and Social Impact Report
Starbucks has set some ambitious, although somewhat vaguely worded, goals for themselves, these include:
- Expand plant-based menu options
- Shift away from single use to reusable packaging
- Invest in regenerative agriculture, reforestation, forest conservation and water replenishment in their supply chain
- Invest in better ways to manage their waste
- Innovate to develop more sustainable stores, operations, manufacturing and delivery
What I like most about the Starbucks report card is that it feels more honest and less warm and fuzzy than Apple and Nike. Make no mistake, taking a behemoth of a company into a greener future is no easy task. When everything seems to be going well, it gives me a sense of doubt – what’s missing from this report.
On the other hand, if you read through the results below they aren’t so glowing. GHGs went up last year, rather than down. While increased GHGs isn’t something to celebrate, transparency is.
You can read the entire Starbucks 2021 Global Environmental and Social Impact Report here.
In Closing…
It’s really easy to look at enormous companies as the enemy in the fight for sustainability. It’s much harder to look for the good and reward those companies while continuing to push for change.
Whether we like it or not, the private sector needs to come along for the ride in combating the climate crisis, so let’s look for companies that are implementing change and give them priority of place in our investment portfolios, instead of lazy actors doing nothing or worse – greenwashing.
Nike, Apple, and Starbucks are three of those companies, and given their size and global reach, they have the power to put a massive dent in GHG emissions. I applaud their efforts and hope they’ll continue to push themselves to do better.
