Pharmaceutical, Biotech and Banking Companies Lead the Way in Social Responsibility

It might seem counterintuitive that Merck KGaA, a German science and technology company with a market value of about $67 billion, would pay attention to a neglected tropical disease called schistosomiasis that mostly affects poor and rural communities.

Similarly, providing financial services to underserved parts of the population might not be the most obvious growth strategy for Bank of Montreal, a Canadian banking and financial-services company with about $740 billion in assets under management as of July 31.

Both companies found that serving local communities—and burnishing their reputations as socially responsible businesses—pays off. These efforts helped land Merck and BMO among the top 100 companies in The Wall Street Journal’s new ranking of the world’s most sustainably managed companies.

The ranking is based on a scoring system that Journal research analysts used to compare more than 5,500 publicly traded companies world-wide in areas including social capital, the environment, human capital and business model/innovation, following the framework of the Sustainability Accounting Standards Board, a nonprofit that defines sustainability categories that are likely to significantly affect a company’s performance.

Pharmaceutical, biotechnology and banking businesses dominated the top of the social-capital list, led by Merck. U.S. conglomerate Johnson & Johnson, BMO and German science-and-biotech group Bayer AG all ranked in the top five, with banking giant Citigroup Inc. in sixth and financial-services group Investec PLC, dually listed in South Africa and the U.K., in ninth.

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