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NEWS July 19th 2001
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Related Articles ‘Squaring up to the Square Mile’ – a rough guide to the city of London, published before June 18th |
Editorial - Greenwash and GO! Positive engagement types were no doubt intially overjoyed at last week’s launch of the FTSE4Good Index – for a moment it almost seemed that the people at FTSE, those all-hallowed scorekeepers of UK capitalism, have blasphemed against their worship of the god of the free market and are introducing a ‘socially responsible’ index. The new index is supposed to provide a guide for ethical investors. Good idea, you may think, an index without all the planet-trashers, animal testers, child-labour exploiters, dictator-arse-lickers and general corporate baddies. Okay, it’s not revolutionary, but it’s a start – except that only about a third of the companies currently in the FTSE All-Share are excluded. BP, Shell and Monsanto, among others, somehow slipped through the net, though there were odd exclusions such as Tesco (though not Sainsbury’s) and Royal Bank of Scotland (though other banks qualified). This might have somehting to do with the criteria for inclusion. Some obvious industries – arms, tobacco and the nuclear industry, for instance, are excluded, though the index only excludes ‘companies manufacturing whole weapons systems’ – i.e. not weapons parts manufacturers. Otherwise, the criteria are overwhelmingly dominated by requirements that companies have ‘policies’ and ‘management systems’ and include very little about actual behaviour. Many criteria are ‘either/or’ scenarios, making the lists sound more impressive than they are. The criteria fall into three sections – environment, social issues and human rights. Under ‘environment’, almost all the criteria for qualification relate to the company having stated policies or reporting on performance (independent reviews are not required) and only one third of the company’s operations must be covered by the environmental management system. Under ‘social issues’, not only are the few concrete targets (again, mainly either/or scenarios) extremely low, and the main emphasis on policy, but the criteria on equal opportunities, health and safety and labour relations are satisfied by ‘assigning responsibility to a senior manager’ (never mind actual performance) and the main area of ‘practice’ is charitable giving. Under ‘human rights’ companies are only assessed if they are judged to be ‘high risk’ – working in countries with very poor human rights records (the list of these does not include Turkey, Nigeria or anywhere in Latin America). Again, policy statements are sufficient to qualify. To put it crudely, the criteria are a pile of pants – a reward for spending on green marketing. There seems to be a 'greenwash and go' philosophy at work - attempts to appear responsible are mistaken for the real thing: PR washes greener than green. A cynic would argue that the FTSE is simply jumping on the corporate responsibility bandwagon - corralling the 'ethical' as a niche market while maintaining the myth that it's okay to run the global economy on rules a backstreet casino would consider a bit dodgy. |