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We often hear the term and we're told it's a good thing. But before we look at the world's most sustainable companies, it's worth understanding what the term actually means.

Sustainability may conjure up images of recycled tea bags and home grown veg, but what does it mean when it comes to multi-billion dollar global industries?

The United Nations defines sustainable development as, "Development that meets the needs of the present without compromising the ability of future generations to meet their own needs."

The world's most sustainable companies are those which do the most to minimise their negative impact on the environment, society and economy while maximising their positive impact.

Although this looks like some kind of fantastical sustainability machine, sadly it is just a diagram showing the many complex assessments that go in to measuring each company's performance for the Dow Jones Sustainability Index (DJSI).

The DJSI is a globally recognised independent benchmark that measures the performance of the largest 2,500 global companies. Here are the industry leaders in five key sectors.

Cars

BMW, Germany

The DJSI says BMW leads the motor industry with its outstanding environmental and social performance. The company’s efficiency improvements have led to a reduction in average fleet emissions of CO2 per kilometre by 3.3% over the past year.

The Index says that in addition to its strong environmental performance, BMW is one of the world’s most attractive employers. It offers staff numerous opportunities for education and training. The company has also demonstrated an impressive commitment to human rights.

Consumer goods

LG Electronics, South Korea

LG has set itself 'Greener 2020' goals which include a 40% reduction in greenhouse gas emissions, as well as a 15% increase in ‘green’ new business.

The Index says that since 2008, the manufacturer has reduced total greenhouse gas emission by 353,000 tonnes. Through green packaging guidelines, LG has reduced the weight of packaging and logistical costs.

LG invested 91% of its social investment budget into community initiatives, using the company's tech expertise to develop accessibility apps for public use and contribute to public infrastructure.

Food and drink

Nestlé, Switzerland

With an overall score of 92 out of 100 (pdf, 600Kb), Nestlé received industry-best scores in all three dimensions: Economic, Environmental and Social.

The Index praised the company for the 'outstanding steps' it has taken to embed human rights into supplier management policies, as well as its industry leadership in health and nutrition.

Awarding Nestlé an 'Environmental score' of 100, the Index recognised the company’s commitment to ensuring that its products and processes are as environmentally and socially friendly as possible.

For example, in Switzerland Nestlé recently partnered with local farmers to open the country’s largest agriculture biogas plant, which uses manure from cattle to generate green energy for its Henniez bottled water factory and the Swiss power grid.

In return, the farmers receive a more environmentally friendly manure, and Nestlé also helps them care for the local environment. Projects like this helped earn a company score of 98 out of 100 in the DJSI social dimension for Corporate Citizenship/Philanthropy.

Household products

Unilever, Netherlands

The DJSI found sustainability is evident throughout Unilever’s operations.

For example, Dove is recognized for its self-esteem project, which challenges beauty norms and encourages women to feel confident in their own bodies. The project has reached 19 million young people and made Dove one of Unilever’s top selling brands.

Unilever has also made excellent progress towards increasing the number of women in leadership positions. Now, 45% of management positions in the company are held by women.

The Unilever Sustainable Living Plan, has a goal of halving the environmental impact of the company's products. The company already has reduced the amount of waste associated with the disposal of products by 29% since 2010.

Technology hardware

Hewlett Packard Enterprise Co, USA

The DJSI found that HPE continues to prioritise economic, environmental, and social aspects in its business strategies.

The company has performed exceptionally well in the areas of employment. Its work on privacy protection has underpinned its commitment to employee and customer welfare and human rights.

The Index notes that innovation management is another strength of the company, and the new strategic direction of the company - intensified focus on services and consulting - will allow the company to compete on new fronts.

Why does it matter?

When corporations invest in their communities, those companies become a place where people want to work. When people work for an employer that gives back, they feel that they are contributing to a better world.

Companies that value their employees as individuals and community members are more likely to enjoy more loyalty and enthusiasm from staff which ultimately yields higher customer satisfaction.

Being socially and environmentally responsible is also what customers expect. Increasingly people want to understand the impact of their spending. Companies that understand this are the ones already highly focused on making the most sustainable choices in the business models.