The Global Compact 100 is a stock index composed of a representative group of UN Global Compact companies, selected based on implementation of the Ten Principles and evidence of executive leadership commitment and consistent base-line profitability.
Developed by Sustainalytics, the Global Compact 100 does not look at sustainability performance in isolation of basic financial health. Rather it marries corporate performance on environmental, social and governance (ESG) issues with a requirement of consistent base-line profitability.
The index showed total investment return of 21.8 percent by the end of its first year, surpassing the S&P global mid and large-cap benchmark over this period.
While performance of the Global Compact 100 should not be seen as evidence of a causal relationship between a commitment to corporate sustainability practices and stock performance, it does suggest that companies exhibiting enhanced commitment to ESG issues have the potential to perform better in financial markets over time.
During the backtesting period from September 2010 to September 2013, the Global Compact 100 showed similar performance to the global mid and large-cap indexes and outperformed in the more recent two years. The data for total returns based in US dollars is as follows:
- Global Compact 100 rose 26.4% during the most recent year; FTSE® All World rose 22.1%
- Global Compact 100 rose 19.0% CAGR over the most recent 2 years; FTSE® All World rose 17.7%
- Global Compact 100 rose 12.0% CAGR over the 3 year period; FTSE® All World rose 12.0%
Disclaimer: The Global Compact 100 was in no way produced, endorsed or supported by FTSE or its licensors.