As a maker of energy control and optimization systems, Woodward's business is built around optimizing energy efficiency for its corporate customers. So it's not surprising that the company, among our list of companies with the best ESG rankings, is aware of its own energy, water and natural gas use.
Woodward designs, manufactures and services control systems and components for aerospace and other industries. The company ranked third in IBD's 2023 list of the 100 Best ESG Companies.
The Fort Collins, Colo.-based company bluntly addresses the environmental impact of its products and operations. In its most recent sustainability report, a key factor in its ESG rankings, Woodward pulls no punches.
"For the foreseeable future, the global economy relies primarily on sources of energy that may produce greenhouse gasses," the report states. "We further recognize that environmental responsibility is critical to our long-term viability and success."
In designing, manufacturing and servicing energy conversion and control solutions for its customers in the aerospace and industrial equipment sectors, Woodward acknowledges that it consumes "significant amounts of energy." It adds that energy generation often taps nonrenewable sources.
Read our profiles and interviews on the other top-scoring companies:
- Microsoft: This 'Magnificent Seven' Stock Also Is The Best ESG Company
- At Applied Materials, Cutting Carbon Emissions Is A Team Effort
Best ESG Rankings: Focus On Energy Efficiency
Woodward works closely with local energy suppliers to reduce electrical consumption during peak hours. It also uses recycling, diversion and reuse programs to lower the amount of wastewater and hazardous waste that result from its operations.
The company's environmental endeavors are just part of the reason it's near the top of the ESG rankings on our best companies list. Woodward garnered an ESG score of 71.69 and an IBD Composite Rating of 97. Woodward's shares are up more than 35% so far this year.
Topping the list this year is Microsoft. Applied Materials took second place. Verisk Analytics and Mastercard finished fourth and fifth respectively on the ESG rankings of this year's IBD list.
Public companies that made our 2023 100 Best ESG Companies list combine high Dow Jones sustainability scores with superior IBD technical and fundamental stock ratings. They are standouts for ESG investing.
Read Our Full Special Report On IBD's 2023 100 Best ESG Companies, Our Feature Story On Green Patent Innovation And See The Full List Of Winners.
Woodward: A Top Employer In Illinois
Woodward was founded in 1870 as a maker of controls for water wheels. It patented the first successful aircraft propeller control in 1934 and then expanded its product line to include diesel engine controls. Today, it's a leader in the aerospace industry.
Ninety years later, it continues to work with aerospace companies. While almost all aircraft use Woodward products, the company has diversified to serve wide-ranging industrial markets.
The company's ESG efforts have garnered praise. It was recently named one of Forbes America's Best-in-State Employers in Illinois in 2023. Woodward has extensive operations in Illinois, including engineering, manufacturing, testing and administration sites in Rockland, Loves Park and Niles.
Since 2007, Woodward has participated as a Platinum Level member in a voluntary program, Fort Collins Climate Wise, in which local businesses reduce their impact through energy and water conservation, waste reduction, alternative transportation and social responsibility. Its renovated worksites include LED lights, daylight harvesting, occupancy sensors and a building energy management system that tracks and reduces energy usage.
At Woodward's design-to-manufacturing concept development site in Fort Collins, a new roof was designed for more efficient and emission-friendly temperature regulation. Vast skylights optimize thermal performance and all interior finishes contain either no or low VOC (volatile organic compounds) which improves indoor air quality by cutting gas emissions.
Confronting Human Rights Abuses Around The World
Woodward's long-standing efforts to cut energy use have produced concrete gains. From 2018 to 2020, for example, the company decreased electricity consumption per $1,000 of sales by 9%.
With locations in more than a dozen countries, Woodward seeks to be a responsible global corporate citizen. Among its sustainability objectives is a commitment to "work together with our stakeholders to prevent human trafficking, child labor and corrupt practices."
Through its Ethics Help Line, the company requires employees to report any suspected human rights violations. Its Supplier Code of Conduct promotes awareness and reporting of such violations.
Its employees conduct extensive due diligence of Woodward's supply chain to mitigate the risk that its products contain materials procured from sources which fund armed groups and groups engaged in human rights abuses on local populations in foreign countries. The company encourages smelters and refiners of conflict minerals to agree to an independent third-party audit program.
