Which is the most ethical firm in Britain? Ruth Sunderland, Heather Stewart and Zoe Wood introduce exclusive new research that reveals the true picture
Sunday August 26, 2007
The Observer
It might seem slightly odd to think about ethical investing in the middle of stock market turmoil. But, if anything, the market melee underlines how important it is for companies to have sound fundamental values so that they have a good chance, over the long term, of weathering the storms.
Despite what the cynics might think, ethics have always had a place in business. The forebears of some of today's business leaders brought their Quaker values to their commercial dealings and some of the companies they founded are still here, including Barclays and Unilever.
Millions of us have a stake in corporate ethics, whether as private investors, customers or employees. Businesses - though they sometimes forget it - are here to serve people, not the other way around, and they play an important role in communities both here and in the wider world. They can be a huge force for good as well as for ill - so long as investors and other stakeholders hold them accountable.
The concept of ethical investing is fraught with difficulty because it is so subjective. People disagree on whether certain activities, such as animal testing or arms manufacture, are justifiable or not. They also differ on the best ways to address problematic issues such as climate change or making medicines available in the developing world.
Every investor must make up his or her own mind, and we are not tipping any particular shares. However, businesses that fail to identify the risks facing their particular industry and then devise a sustainable strategy to deal with them are likely to suffer financial damage. In this week's Good Companies Guide, compiled with research from Co-operative Investments, we identify the best 20 firms in the FTSE 350 index, assessed on a range of social, environmental and corporate governance criteria, and show how well the businesses in the FTSE 100 index of leading shares are faring.
We also turn a spotlight on the food retailing and banking sectors, both popular with private investors, but which face a range of tough challenges.
FTSE 350 tool hire group Speedy Hire was the surprise winner, scoring highly thanks to a no-nonsense approach that included jargon-free corporate social responsibility (CSR) reports. The Liverpool company, which lends potentially dangerous equipment to the construction industry, has made health and safety a key business plank. This has not stopped Speedy Hire substantially outperforming the FTSE All Share over the past five years.
Runner-up in the top 20, Scottish & Southern Energy has pioneered green energy products, with projects such as cleaner coal and offshore wind farms. Its customers are the most contented, but can it keep up the good work under new Spanish parent Iberdrola? Retailers all fly the green flag these days, but CSR veteran Kingfisher came out on top in this field, and was placed in fourth position overall. The B&Q owner's CSR agenda includes using sustainable timber and employing older workers. M&S ranked highly, having thrown down the gauntlet with its carbon-neutral 'Plan A' pledge. Stove maker Aga Foodservice's lobbying on carbon dioxide emissions also propelled it into the top 20.
Another strong performer was Stagecoach, parked in the top five in recognition of its commitment to lower-emission fuels and social inclusion work with schools and the police. However, it should watch the rear-view mirror as National Express, at 14, abandons trials of biofuels due to social and environmental risks. Finally, telecoms giant BT proved a good all-rounder, tackling broader issues such as access to technology for lower-income families and older customers.
Bright Green are working towards a brighter, greener future in the world's organisations by providing top talent to meet their environmental & sustainability challenges. For more information, visit www.brightgreentalent.com
- The Guardian
- Thursday August 16 2007
Some tipping points for climate change could be closer than previously thought. Scientists are predicting that the loss of the massive Greenland ice sheet may now be unstoppable and lead to catastrophic sea-level rises around the world.
In drawing together research on tipping points, where damage due to climate change occurs irreversibly and at an increasing rate, the researchers concluded that the risks were much greater than those predicted by the latest report by the Intergovernmental Panel on Climate Change (IPCC).
If the Greenland ice sheet melted completely, for example, it would raise global sea levels by seven metres. According to the IPCC report, the melting should take about 1,000 years. But the study, by Tim Lenton of the University of East Anglia, showed the break-up could happen more quickly, in 300 years. Professor Lenton said: "We know that ice sheets in the last ice age collapsed faster than any current models can capture, so our models are known to be too sluggish."
His study identified eight tipping points that could be passed by the end of this century. They include the destruction of the Amazon rainforest, the melting of the west Antarctic ice sheet, and a collapse of the global ocean current known as the thermohaline circulation. If that circulation stopped, the Indian monsoons and the gulf stream could be shut down.
Prof Lenton said the IPCC way of working, including multiple reviews, caused it to issue more conservative reports than his team's studies. He added that the inevitable collapse of the Greenland ice sheet was closer than thought because of the latency in the Earth's climate system. "If you could stabilise the greenhouse gas levels to today's level, you'll still get some further warming [by 2100]."
A global average temperature rise of just 1C would be enough to slip the Greenland ice over the edge. The IPCC's prediction for 2100 is a rise of 1.1C-6.4C.
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