Despite recent headlines highlighting the environmental impact of China’s electric vehicle (EV) boom, the country’s leading EV manufacturers have emerged as the fastest risers on a ranking of Asia Pacific’s most sustainable companies.
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Shanghai-headquartered NIO Inc, Wuxi- based Yadea Group Holdings Ltd, Li Auto Inc from Beijing and Guangdong’s XPeng Inc ranked in the top 50 of the Global 100 list of the world’s greenest firms, assessed by Canada-based media and research company Corporate Knights.
The Asian super power’s manufacturing dominance has been a driving force behind the rapid adoption of affordable EVs globally, accounting for almost 80 per cent of global production.
Although EVs do not depend on climate-changing fossil fuels, China’s control over critical battery materials have been feared to lead to environmental damage from intensive mining practices in countries such as Indonesia and the Democratic Republic of Congo.
But the four firms that surged in rankings from last year have shown that they have derived 100 per cent of their revenue and investment only from sustainable sources.
NIO has been expanding its battery swapping services in the past year, which cuts down greenhouse gas emissions associated with grid-powered charging or fossil-fuel-based vehicles. Yadea launched its sodium battery technology which do not rely heavily on rare metals and utilise more renewable energy resources.
Zhongshan-based light emitting diode manufacturer MLS Co Ltd, South Korean battery maker LG Energy Solution, Ltd, and Taiwanese companies like solar firm Voltronic Power Technology Corp and Taiwan Cooperative Financial Holding Co Ltd made their debut on the index this year, all recognised for profiting from business consistent with the United Nations’ Sustainable Development Goals.
However, Australian metals recycler Sims Limited is the greenest company in Asia Pacific in the yearly index.
The 107-year old firm slipped from the top of the global ranking from last year to second spot, but remains a global leader in recycling ferrous and non-ferrous metals from dealers, demolition firms and others who generate obsolete metal.
The second most sustainable company in the region was Taiwan High Speed Rail Corp, which still scored poorly for racial diversity like previous years. The 17-year-old firm has an all-Taiwanese board, and an 80 per cent ratio of male board members. Its revenue to its direct emissions ratio is better than only 36 per cent of its peers.
The Global 100 was announced on the sidelines of the World Economic Forum in Davos.
The annual ranking quantitatively compares and ranks the world’s largest publicly traded companies, equally emphasising the impact of a company’s operations and its core products and services on people and the planet.
It assessed 8,359 companies with more than US$1 billion in revenues against 25 sustainability indicators, including revenue and investment derived from sustainable sources, taxes paid, how much value is created with fewer carbon-based fossil resources, racial and gender diversity.
Singapore real estate firm City Developments Limited (CDL), which fell 17 spots from last year, scored well in its clean energy and investment ratings. However, its pay gap widened this year, with top management earning 78 times more than the average worker, compared to 38 in 2024.
The 62 year-old firm’s local rival CapitaLand dropped out of the index this year.
Western firms still the world’s most sustainable
The number of Asia Pacific companies that made it on to the index fell from to 22 from 24 last year, and the list continues to be composed of Western companies. Nearly half (44) are from Europe, and 22 are from the United States and Canada.
France’s Schneider Electric, a digital energy and automation solutions provider, cinched the top spot this year by moving up 7 places from 2024. It earned all of its revenue from, and directed all of its investments towards energy efficiency, electrification and decarbonisation of its data centres, buildings, and homes, as well as committing to no net biodiversity loss in its operations in five years to preserve natural ecosystems and resources.
Vestas Wind Systems A/S, ranked the world’s most sustainable company in 2022 and in second spot last year, remained in third spot in the global index. The Danish renewable energy company is responsible for almost a fifth of the world’s installed wind power capacity.
Brambles, a Sydney-headquartered logistics business, which rents recycled shipping pallets and containers, dropped from second last year to fourth spot.