Chiquita, Herman Miller, Swiss Re Head up Top Sustainable-Business Stocks

Chiquita, Herman Miller, Swiss Re Head up Top Sustainable-Business Stocks

SustainableBusiness.com has announced the 2005 SB20 list - its annual list of what it considers the world's top sustainable business stocks. The list is presented in the Progressive Investor newsletter published by SustainableBusiness.com, which tracks stocks this emerging marketplace.

To choose the 20 companies that make up the list, SustainableBusiness.com asks five leading social/ environmental investment analysts to select the companies that stand out as the world leaders in terms of both sustainability and financial strength. This year's judges were: Terry Foecke, managing director of investment research, Materials Productivity LLC; Patrick McVeigh, vice president of investment research, Lowell, Blake & Associates; Carsten Henningsen, co-founder and principal, Portfolio 21 mutual fund; Matt Patsky, managing director, Portfolio 21 mutual fund; Elizabeth Levy, research analyst, Winslow Management Compan's Green Growth Fund; and Max Deml, editor and publisher, Oeko Invest Publishing Ltd.

To be included in the list, companies must be considered a model of sustainable business -- infusing sustainable practices throughout the "DNA" of the company -- or its products/ services directly reduce environmental problems. On the financial side, a company must have a history of healthy profitability, and be considered investable by the judges. Most, if not all of the companies, also stand out on the social side.

"Our goal is to create a list that showcases the top public companies leading the way to a sustainable society," said Rona Fried, Ph.D., SustainableBusiness.com CEO and editor of Progressive Investor.

The judges described some of their picks this way:
  • "Electrolux, Herman Miller, Swiss Re, Novozymes are household names in sustainable business -- whether it's Electrolux devising industry-leading lifecycle analyses for appliances or Herman Miller in furniture, Swiss Re taking a public stand on global warming, or Novozymes replacing synthetic chemicals with benign enzymes in a legion of industry sectors -- they take the lead and coax the rest of their industry to follow suit."

  • "Many of the companies are transforming old-line industries by setting an example: Henkel in chemicals; Chiquita in bananas; Green Mountain Coffee in coffee; Baldor in motors; and East Japan Railways in railroads."

  • "East Japan Railway, the world's largest passenger railroad, incorporates a wide range of sustainable business practices from green procurement and efficient engines, to experimenting with wind and solar energy to run its trains."

  • "Whole Foods Market is the darling of the natural foods industry. Besides integrating organic and natural products into the mainstream, the company uses green building practices in new stores and generates over 20% of its total power load from green energy. Timberland employees get an unheard of 40 hours paid time off each year to do community service."
With the renewable energy sector growing rapidly, Vestas (the world's largest wind company), is joined this year by German solar leader SolarWorld, the world's largest pure-play solar company.

Japan's Sharp Corporation also joins the list this year. The world's leading producer of solar photovoltaics (PV) panels for the past five years, Sharp grew its solar business by 64% in fiscal 2004 alone. Going forward, Sharp views its solar and LCD (energy-efficient displays) businesses as its primary directions for growth.

Also new to this year's list is the first Latin American company -- Natura Cosméticos, the largest personal care manufacturer in Brazil -- and the first Australian company, Sims Group, one of the largest recyclers in the world.

Patrick McVeigh, Lowell Blake & Associates, describes the listed companies as those that "[open] the door to another part of our world on sustainability issues." The example cited was Natura, which is greening its product lines and recently launched its first all-natural line, Ekos, composed of ingredients harvested from the Amazon rainforest.

The Sims Group is one of the world's largest steel recyclers and is expanding rapidly into appliance and electronics recycling. Terry Foecke of Materials Productivity says, "Sims is a very appealing near-closed-loop model. It is building the infrastructure necessary for high volumes of recycling, setting the stage for significant product takeback."

The judges also report that they liked Power Integrations because when its chips are incorporated into standard appliances, they eliminate huge amounts of wasted energy -- without depending on people to "change their values" or "pay more to be green."

Lastly, Umweltbank AG is a tiny German bank that sets a great example of what banks can do, according to the judges. This bank only lends to environmentally-beneficial projects and companies such as wind parks, solar plants and green buildings.

Precious Woods is included as an Honorable Mention. This small, profitable company is the only publicly-traded sustainable forestry company in the world (based in Switzerland), but U.S. investors cannot purchase stock.

The SB20 List for 2005 - Alphabetical Order

Baldor Electric Co. (NYSE: BEZ)**
Canon Inc. (NYSE: CAJ)**
Chiquita Brands International (NYSE: CQB)****
East Japan Railway (Tokyo: 9020)**
Electrolux AB (Stockholm: ELUXB)****
Green Mountain Coffee Roasters (Nasdaq: GMCR)****
Henkel (Berlin: HEN.BE )****
Herman Miller (NYSE: MLHR)****
Natura Cosméticos SA (Sao Paolo:NATU3.SA)
Novozymes A/S (Copenhagen: NZYMb.CO)****
Power Integrations (Nasdaq: POWI)**
Sharp Corp. (Tokyo: 6753)
Sims Group Ltd. (Australia: SMS.AX)
SolarWorld AG (Berlin: SWV.BE)
STMicroelectronics NV (NYSE:STM)****
Swiss Re (Geneva: RUKN:SWX)****
Timberland Co. (NYSE:TBL)***
Umweltbank (Berlin: UBK.BE)
Vestas Wind Systems AS (Copenhagen: VWS.CO)****
Whole Foods Market (Nasdaq: WFMI)****

Honorable Mention:

Precious Woods (Geneva: PRWN: SWX)

(* Denotes the number of years companies have been on the list.)