Outotec Essay

Outotec is on Corporate Knights’ global 100 list for the 6th year in a row. The list first screens for the companies’ sustainability disclosure. “Companies that fail to disclose at least 75% of the “priority indicators” for their respective GICS Industry Group are eliminated ...” The second screen is the Piotroski F-Score. According to corporateknights.com a company has to pass five of the following nine tests to pass this screen. “Net profit is positive; Operating cash flow is positive; Net profit ÷ total assets at beginning of year, minus the same number for the previous year is positive; Operating cash flow is greater than net profit; Long term debt ÷ by average assets has not increased; The current ratio has increased (the change is more than zero, so even a negligible increase passes the test); No raising of ordinary (common) equity over the previous year: this test is passed if the company did not issue any ordinary shares (excluding shares from dividend reinvestment plans); Gross margin has improved over the previous year; and Asset turnover has increased.” The third screen is

If they could be more profitable without good public relations, they would not have so much information and promotion of their practices on the website. I believe profit is at the heart of Outotec’s direction, but sustainable energy just happens to be the most effective and profitable strategy for the company. I do not expect the espoused values to be fully ingrained in the organization, because the company has formed as a result of companies that existed before sustainability was understood to be an issue. It is unlikely that two companies that did not concern themselves with sustainability before have merged into a company that does. Rather, companies with the mission of sustainability should start from scratch. To change the direction of an organization is harder than starting one