12 August 2007The GuardianHarriet Meyer
Finding out which companies are truly eco-friendly can be tricky. Many are keen to assert a 'green' agenda by peppering annual reports with buzz words such as 'environmental' and 'sustainable'. But look closer and you will find these documents often contain much useful information that can help you to assess how squeaky clean a company really is. 'Most large- and medium-sized listed companies include performance data on environmental, sustainable and social issues in their reports,' says Mark Robertson of the Ethical Investment Research Service .
Usually, annual reports are sent only to shareholders, but a website service launched last week by EveryInvestor gives free access to a database of more than 3,000 UK company reports (www.fcreports.com). Simply type in the company name to see its annual report and if it includes a sustainability section.
With more and more companies providing sustainability reports, it can be difficult to tell which ones are taking it seriously. 'Look for hard facts and numbers on both environmental and social issues,' says Martin Gibson, director of Envirowise, a government-funded programme that advises businesses on ways to reduce their environmental footprints. 'Reference to sustainability indexes and FTSE 4 Good and implementation of an environmental management system are some actions that can provide useful evidence of a company's commitment.'
'The truth is in the data,' adds Harriet Parker, an analyst at Morley, the fund management arm of Norwich Union, which has more than £165bn under its control. 'Assess what the company has achieved over the year, rather than its aspirational statements, to move away from the greenwash to the genuine.'
According to Richard Mattison of Trucost, an environmental research organisation, a few blue-chip companies that provide clear and concrete evidence of their green credentials in their reports include BT and Marks & Spencer. 'At the other end of the spectrum is Cable & Wireless, stating that it doesn't see environmental matters as important in its report.'
Performance figures will tell you if a company's policies have been working, for example if it has reduced water consumption and carbon emissions over the past year, says Parker.
It is worthwhile seeing if a company is one of the thousands that subscribe to ISO 14001, the international management standard born at the climate change summit in Rio in 1992, which audits environmental performance.
It identifies the activities of a firm that have an environmental impact and sets improvement targets and a management programme to achieve them. About 8,000 British companies and 100,000 international businesses have ISO 14001 registration.
In practical terms this might mean, for example, a company ensuring that all lights and computers are switched off at night and at weekends and recycling all its paper.
If you need help investigating how environmental or ethical a company is before investing in it, you can contact the research service EIRIS (www.eiris.org; 020 7840 5700). It also produces a guide to ethical banking which covers the major financial institutions.
For ethically minded consumers, there are a variety of websites offering useful information on a large range of popular brands and companies. A few of the more accessible include www.ethicalconsumer.org and www.ethical-company-organisation.org.
Finally, bear in mind that most companies are involved in activities that somebody somewhere may object to. 'It's best to prioritise your concerns and decide which issues are the most important to you, then do the research,' says Robertson.
