Companies have a lot of good reasons to pay close attention to environmental, social and governance factors: attracting talented employees who want to work at a place that is making a positive impact on the world; responding to regulators who are demanding more ESG-related transparency; and pleasing major investors who are pushing them to be sustainable for the long haul.
But there’s at least one thing that being ESG-minded may not do: help a corporation stand out from the crowd as much as other actions might.
That’s the big takeaway from our latest analysis of the Management Top 250, an annual ranking produced in partnership between the Drucker Institute and The Wall Street Journal. It uses the central principles of Peter Drucker to assess a company’s “effectiveness,” which the late management scholar defined as “doing the right things well.” The 2020 list was published in December.
In all, we evaluated 886 large, publicly traded companies last year through the lens of 33 indicators that fall into five categories: customer satisfaction, employee engagement and development, innovation, social responsibility and financial strength.
To form our rankings, firms are compared in each of the five areas, as well as in their overall effectiveness, through standardized scores with a typical range of 0 to 100 and a mean of 50.
