Barron’s 100 Most Sustainable Companies

Many companies would love a break on labor, after a year of strife when workers from Hollywood to Detroit flexed their muscle. It may be wishful thinking to expect a reprieve.

A resilient economy isn’t likely to shift leverage from workers to corporate bosses. Despite pockets of layoffs, namely in technology, the job market remains tight, with unemployment near record lows. A backlash against “diversity, equity, and inclusion” initiatives, or DEI, is jumping from colleges to companies— Alphabet and Meta Platforms have reportedly pulled back, for instance. Throw in a virtual lockdown on immigration, combined with a spike in U.S. manufacturing, and many companies may have another rough year of labor challenges.

Some companies are navigating these issues better than others—finding ways to reward workers and meet DEI goals without taking big hits to their profits or reputations for social responsibility. Several of those faring well made it into Barron’s ranking of the 100 most sustainable companies .

To make the list, our seventh annual ranking, companies were scored on a variety of environmental, social, and governance, or ESG, measures. Barron’s worked with Calvert Research and Management, a leader in responsible investing, to rank the companies. The top 100 firms—winnowed from the largest 1,000 publicly traded U.S. companies—achieved the highest scores across 230 ESG metrics, from workplace diversity to greenhouse-gas emissions. (See below for the complete list and more about the methodology.)

Home-products company Clorox sits at the top of the leader board for the second straight year, edging out Kimberly-Clark , CBRE Group , Hasbro , and Agilent Technologies in the top five. The overall lineup spans a wide range of industries, with tech, industrials, and consumer companies all well represented.

Many of the companies delivered solid results for shareholders. The top 100 returned an average 19% in 2023, versus 26%, including dividends, for the S&P 500 index. That doesn’t look great. But the S&P 500 is weighted by market capitalisation and last year’s “Magnificent Seven”— Apple , Microsoft , Amazon.com , Nvidia , Meta Platforms, Tesla , and Alphabet—fuelled almost all the market’s gains. Strip away that influence, and the equal-weighted S&P 500 returned 14%, trailing the 100 most sustainable companies.

Several stocks delivered standout returns in 2023, led by chip maker Nvidia, ranked 41st with a 239% gain. Other tech winners included HubSpot , Intel , Applied Materials , and Lam Research . Strong performers in other industries were Trex , Lennox International , Williams-Sonoma , Insight Enterprises , and Owens Corning .

A big theme in this year’s rankings was progress on corporate governance and labor relations, says Chris Madden, a managing director at Calvert, which is owned by Morgan Stanley Investment Management. “A lot of the companies on this list have done a stellar job dealing with employees,” he says.

Strikes were big in 2023 as Hollywood screenwriters and Detroit auto workers took to the picket lines, winning concessions and pay raises. Pilots and other unionised groups fared well, breathing life back into the organised labour movement, which had been in decline since the 1950s. New technologies such as artificial intelligence and electric vehicles are upending vast industries, prompting workers to demand more protections.

Tensions between companies and employees are spilling over in more public ways, thanks in part to social media; workers are using platforms like X and TikTok to amplify their message or try to shame their employer, says Alison Taylor, clinical associate professor at NYU Stern School of Business and author of a new book, Higher Ground . One of the most interesting recent trends, she says, has been the rise of “strategic leaking, where young employees undercut sunny messaging from the top with their own lived experiences.” She cites the trend of sharing layoff experiences on TikTok as an example.

Battles are also brewing over DEI, including a political backlash by conservatives, complicating corporate efforts to meet their own DEI goals. Last year, a number of high-profile chief diversity officers exited their roles at some of the biggest U.S. companies, including Walt Disney and Netflix . This month, Zoom Video Communications fired a team focused on DEI initiatives as part of a round of layoffs.

The issue is also bubbling up in the presidential race. During a rally in Philadelphia last year, presidential hopeful Donald Trump promised to eliminate all diversity, equity, and inclusion programs “across the entire federal government.”

Many companies say they remain committed to DEI goals. According to a Conference Board survey late last year of chief human resource officers, none planned to scale back their diversity efforts, while 75% said improving the employee experience and organisational culture would be a top focus in 2024. Alphabet said in a statement that it is inaccurate to suggest it is “deprioritising our longstanding efforts for underrepresented communities.”

One company that scored well on labour and other sustainability factors was Walmart . The world’s largest retailer landed at 61 on the list. “Walmart stands out for its strong labour practices,” says Helen Mbugua-Kahuki, Calvert’s director of research. “We’ve seen Walmart do a really good job as it pertains to increasing wages for its workers.”

One of America’s largest employers, with 1.6 million U.S. workers, Walmart raised entry-level pay for store workers last year, taking its average hourly wage to $18, well above the federal minimum of $7.25. The company also increased wages for store managers to an average $128,000, plus better bonuses. A Walmart spokesperson said the retailer has been “investing in its front-line hourly associates for the past several years.”

Walmart’s other positives include education and training benefits, which the company says have saved workers nearly $500 million over the past five years. Calvert gives the company high marks for being more open to worker feedback through new digital forums . “It’s a form of open communication and provision for employees to freely express themselves,” Mbugua-Kahuki says.

Walmart still has its labour critics. The company has faced multiple lawsuits over gender discrimination. None of its roughly 4,700 U.S. stores have unionised, making it the largest U.S. employer without any unionised workers. In January, the National Labor Relations Board’s San Francisco office issued a complaint against a Walmart store in Eureka, Calif., alleging violations of labor rights. The NLRB said there are 21 other unfair labor practice cases open against Walmart.

Walmart has denied the NLRB’s allegations in a legal response . The company didn’t respond to a request for comment.

Other Faces of Sustainability

Calvert says Clorox, whose brands include its namesake bleach, Burt’s Bees cosmetics, and Glad trash bags, took top honours thanks to its strong governance structure and pay equity, among other factors. The firm’s board is diverse, with 50% women and 25% people of colour. In 2023, Clorox once again achieved pay equity, which means “no statistically significant differences” in pay by gender globally and race or ethnicity in the U.S., according to Clorox. “Pay equity is important because it creates a better culture,” says Madden.

Clorox’s shares underperformed the market in 2023, in part because of a cyberattack that caused wide-scale disruptions and hurt financial results. But its workers, at least, appear to be well treated, with perks including more flexible time for all. “We really intend for people to use this to refuel their tanks,” says Kirsten Marriner, chief people and corporate affairs officer.

About a fifth of this year’s list consists of newcomers. Game publisher Electronic Arts made the list for the first time, debuting at No. 32. Calvert says the company is making strides in DEI, including a push for better representation of women in its games. EA’s hugely popular Ultimate Team mode saw women football players introduced for the first time last year . Calvert also lauds the company for hiring “underrepresented talent” above the average rate in the industry for the fifth straight year and placing more minorities in executive roles. EA declined an interview but confirmed Calvert’s information.

Also making its debut this year is Trex, landing at No. 68. The company is a leading maker of “wood-alternative” home decking and railings made from a blend of recycled and reclaimed raw materials.

Some companies made a big leap up in this year’s ranking, among them Tetra Tech , which jumped from No. 56 to No. 8. Calvert singled out the consulting and engineering firm for its efforts to remediate toxic per- and polyfluoroalkyl substances, or PFAS, better known as “forever” chemicals. But it noted that Tetra Tech “could improve on human-capital management and offer more incentives for its employees.”

How We Ranked the Companies

To build our list of most sustainable companies, Barron’s worked with Calvert, a leader in ESG investing. Starting with the 1,000 largest publicly traded companies by market value—excluding real estate investment trusts—Calvert ranked each one by how it performed in five key constituency categories: shareholders, employees, customers, community, and the planet. Specifically, it looked at more than 230 ESG performance indicators from seven rating companies, including ISS, MSCI, and Sustainalytics, along with other data and Calvert’s internal research.

These data were organised into 28 topics that were then sorted into five categories. In the shareholder category, for example, topics included board structure, business ethics, and executive compensation. For employees, workplace diversity was a key topic. The planet category included greenhouse-gas, or GHG, emissions and related policies; biodiversity; and water stress. Calvert assigned a score of zero to 100 in each category, based on company performance. Then it created a weighted average of the categories for each company, based on how financially material the category was in its industry. To make Barron’s list, a company had to be rated above the bottom quarter in each material stakeholder category. If it performed poorly in any key category that was financially material, it was disqualified.

Former New Hampshire Gov. Chris Sununu delivered a warning to Treasury Secretary Scott Bessent during a recent visit to Washington: Already-high airfares will surge if the war in Iran doesn’t end soon.

Sununu, a Republican who represents some of the biggest airlines as president of the industry group Airlines for America, has for weeks sounded the alarm to Trump administration officials about the economic fallout from high jet fuel prices. The war, Sununu has argued, must come to a close soon, or things will get worse.

Administration officials have gotten the message.

Privately, President Trump’s advisers are increasingly worried that Republicans will pay a political price for the rising fuel costs, according to people familiar with the matter. Many of those advisers are eager to end the war, hoping prices will begin to moderate before November’s midterm elections.

The fallout from the U.S.-Israeli attack in late February has slowed traffic through the Strait of Hormuz, a vital shipping lane, triggering a sharp increase in oil, gasoline and jet-fuel prices.

That means consumers are grappling with high costs ahead of the summer travel season, as they consider vacation plans.

Sixty-three per cent of Americans said they put a great deal or a good amount of blame on Trump for the increase in gas prices, according to a new poll conducted by NPR, PBS and Marist.

More than 8 in 10 Americans said struggles at the gas pump are putting strain on their finances.

Jet-fuel prices roughly doubled in a matter of weeks after the war began, and they have remained high. Airlines have said that will add billions of dollars of additional expenses this year, squeezing profit margins.

U.S. airlines spent more than $5 billion on fuel in March—up 30% from a year earlier, according to government data.

Carriers have been raising ticket prices, hoping to pass the cost along to consumers, and they are culling flights that will no longer make money at higher price levels.

In March, the price of a U.S. domestic round-trip economy ticket rose 21% from a year earlier to $570, according to Airlines Reporting Corp., which tracks travel-agency sales.

So far, airlines have said the higher fares haven’t deterred bookings and they are hoping to recoup more of the fuel-cost increases as the year goes on.

Earlier this week, Trump said the current price of oil is “a very small price to pay for getting rid of a nuclear weapon from people that are really mentally deranged.”

Secretary of State Marco Rubio told reporters that if Iran got a nuclear weapon, the country would have more leverage to keep the strait closed and “make our gas prices like $9 a gallon or $8 a gallon.”

Trump has taken steps in recent days to bring the war to an end. Late Tuesday, the president paused a plan to help guide trapped commercial ships out of the Strait of Hormuz, expressing optimism that a deal could be reached with Iran to end the conflict.

Crude oil prices fell below $100 a barrel on Wednesday, after reports that Iran and the U.S. are working with mediators on a one-page framework to restart negotiations aimed at ending the conflict and opening the strait.

Sununu said Trump administration officials are conscious of the economic fallout from the war: “They get it…and I think that’s why they’re trying to get through the war as fast as they can.”

But he cautioned that it could take months for prices to return to prewar levels.

“Ticket prices won’t go down immediately” after the strait is fully reopened, Sununu said. “You’re looking at elevated ticket prices through the summer and fall because it takes a while for the prices to go down.”

Since the initial U.S.-Israeli attack in late February, Sununu has met in Washington with National Economic Council Director Kevin Hassett, representatives from the Transportation Department and senior White House officials.

A White House official confirmed that Hassett and Sununu have discussed the effect of increased fuel prices on the airline industry. The official said the conversation touched on how the industry can mitigate the impact of high jet fuel prices on consumers.

“The president and his entire energy team anticipated these short-term disruptions to the global energy markets from Operation Epic Fury and had a plan prepared to mitigate these disruptions,” White House spokeswoman Taylor Rogers said, pointing to the administration’s decision to waive a century-old shipping law in a bid to lower the cost of moving oil.

Rogers said the administration is working with industry representatives to “address their concerns, explore potential actions, and inform the president’s policy decisions.”

A Treasury Department spokesman pointed to Bessent’s recent comments on Fox News that the U.S. economy remains strong despite price increases. The spokesman said Treasury officials have met with airline executives, who have reaffirmed strong ticket bookings.

“We’re cognizant that this short-term move up in prices is affecting the American people, but I am also confident, on the other side of this, prices will come down very quickly,” Bessent told Fox News on Monday.

The war has already contributed to one casualty in the industry: Spirit Airlines. Company representatives have said they were forced to close the airline because the sustained surge in jet-fuel prices derailed the company’s plan to emerge from chapter 11 bankruptcy.

The Trump administration and Spirit failed to come to an agreement for the company to receive a financial lifeline of as much as $500 million from the federal government.

Transportation Secretary Sean Duffy has argued that the Iran war wasn’t the cause of Spirit’s demise, pointing to the company’s past financial struggles, as well as the Biden administration’s decision to challenge a merger with JetBlue.

Other budget airlines have also turned to the federal government for help since the U.S.-Israeli attack. A group of budget airlines last month sought $2.5 billion in financial assistance to offset higher fuel costs, and they separately wrote to lawmakers asking for relief from certain ticket taxes.

Barron’s 100 Most Sustainable Companies

Other Faces of Sustainability

How We Ranked the Companies

Administration officials have spoken to the airline industry, which has voiced concerns about the rising costs.