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New index says GlaxoSmithKline and Unilever among most sustainable investments



Swiss sustainability rating agency Inrate has released a new index that ranks Stoxx Europe 50 companies on their environmental and social performances.

Companies from the clothing, energy and transportation sectors have been rated according to the Inrate index, from A plus (most sustainable) to D minus (least).

GlaxoSmithKline, Unilever, and Zurich Insurance Group are among the companies rated most sustainable, while oil giants Total and BP were given a D and Shell a D minus.

The largest companies that were ranked as the most sustainable were found in the clothing, households and software sectors, while those in the energy, resources and nutrition performed poorly.

CEO of Inrate Philippe Spicher said, “The Inrate Sustainability Guide 2013 is the outcome of a three year research and development project which has brought to fruition developments in our methodology we have long believed in.

“And we are committed to further innovation: our next step will be to isolate from the environmental and social context those issues which are material for portfolios and asset managers, for instance those that may affect the risk-adjusted returns of an investment”.

Spicher explained that sustainability indices could sometimes be misleading because of greenwashing by large companies.

Sustainability analysis is often criticised, for focusing too much on the facade erected by companies rather than on the true impact of the building which lies behind it”, he writes in the foreword of the report.

That is why Inrate places the environmental and social impact at the heart of its sustainability analysis. It means we must first analyze and understand a company’s business activities as well as the environmental and social issues at stake.”

Pharmaceuticals firm GlaxoSmithKline is often a popular stock for sustainable investors. After allegations of large-scale bribery at the firm came to light in July, Mike Appleby, a sustainable and responsible investment (SRI) analyst at Alliance Trust, said that they will continue to invest in the company as long as it was 100% committed to cleaning up its act.

Meanwhile, Anglo-Dutch consumer goods firm Unilever recently announced that by the end of 2014, any palm oil in its products will be traceable in order to determine whether it comes from a sustainable source.

Further reading:

Sustainability isn’t about being fluffy; it’s about being strategic

Mandatory corporate responsibility reporting favoured in poll

Stock exchanges at forefront of developing sustainability initiatives

Morgan Stanley sets up sustainable investment body

The Guide to Corporate Social Responsibility 2013