Ethical investors and charities hoping to engage in partnerships with businesses could be cheered by the announcement that companies are improving their environmental and social performance.
The Dow Jones Sustainability Index (DJSI) has completed its 2002 annual review to identify more than 300 companies from 23 countries that lead their industries in terms of sustainability. Launched in 1999, the DJSI was one of the first of several indices that now exist to examine companies' economic, environmental and social performance.
John Prestbo, editor of the Dow Jones Indexes, said: "Over the past 12 months, the average sustainability performance of companies has improved significantly. The integration of economic, environmental and social issues is moving up the business agenda in all sectors and has reached a high level of sophistication in particularly exposed industries."
The DJSI is used by 40 asset managers that run sustainable investment portfolios. It highlights leaders in their market sectors, which include Royal Dutch/Shell, Severn Trent, the BT Group and Volkswagen. Those removed from the DJSI include Australia-based Qantas Airways and Allied Irish Banks.
However, Mark Campanale, a director of the UK Social Investment Forum and socially responsible investment business development manager at Henderson Global Investors, was sceptical about the impact of the index.
"There appears to be much greater interest by corporates that are featured in the index than by the investors themselves,
he said. "The DJSI describes itself as an index, claiming that you can actually create an objective measurement of corporate social responsibility. There is no consensus that the DJSI does that successfully because many of the companies that feature in the index are simply not sustainable."
He also doubted that companies have genuinely become better at sustainability.
"Without a doubt companies have become much better at communicating what they do. It is not clear that companies have improved what they actually do,
I A new code, the London Sustainable Investment Principles, was launched last week by Prime Minister Tony Blair at the World Summit on Sustainable Development in Johannesburg.
The code is an initiative by the Corporation of London to encourage financial institutions to ensure that the business activities that they finance protect or enhance sustainable development.
Signatories, including Henderson Global Investors, Friends Ivory Sime and the Co-operative Bank will report annually on the progress that they have made.
In the coming months, the Corporation of London hopes to appoint a secretariat build on the work and to promote the principles internationally.