The ethics audit 2006

Big brands are despised as enemies of the environment. But they're trying to win back our hearts - by flashing their green credentials. Should we trust them? Martin Hickman reports

COCA-COLA (US)

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£12bn

FRASER RATING

6th

WHY DO WE HATE THEM?

Coca-Cola is a symbol of American commercial imperialism and has an allegedly poor record on human rights and the environment. The company is particularly ruthless in expanding its markets, according to the charity War on Want. Allegations include causing droughts and poisoning water supplies in India, and having links to paramilitary gangs in Columbia where seven trade unionists at Coke bottling plants have been murdered. Sells fat by targeting sugary drinks at teenagers.

WHAT ARE THEY DOING ABOUT IT?

Diversifying. Aware its sugary fizz is contributing to obesity epidemic, Coca-Cola is acquiring and marketing healthier drinks, including the fruity Five Alive and Oasis. Stresses that consumers have the choice to drink diet fizzy drinks. Sponsors worldwide sports events, particularly football tournaments like the World Cup.

DO WE BELIEVE THEM?

Coca-Cola has welcomed an investigation by the International Labor Organisation into the alleged intimidation and murder of trade unionists in Columbia. Commenting on the probe, the company says: "Despite prior audits and assessments, questions about our labour relations practices in Columbia persist."

Coca-Cola has suspended the dumping of "sludge" from operations in Kerala, India, but denies misuse of water supplies. The company won't reveal what proportion of its UK sales are from sugary Coke rather than diet brands, but millions of Britons are glugging concoctions of sugary water, additives and caffeine. A can of regular Coke contains seven teaspoons of sugar.

The company scored 12 out of 28 in recent investigation into what big food companies are doing to promote health conducted by City University in London. Coca-Cola has made no commitment to lowering the levels of salt or sugar in its products.

TESCO (BRITISH)

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£40bn

FRASER RATING

33rd

WHY DO WE HATE THEM?

Tesco's critics claim it bullies suppliers to lower prices, bullies local authorities over planning permission, pushes rivals out of business, hoards land from rivals, erects and operates soulless hypermarkets, shuns the official obesity food labelling scheme and lowers animal welfare standards and workers' conditions.

WHAT ARE THEY DOING ABOUT IT?

On 10 May, Tesco's chief executive Terry Leahy announced a 10-point, £100m planto become a "better neighbour." He pledged to halve energy use in Tesco buildings by 2010, introduce biodegradable carrier bags, stock more local produce and consult communities about new stores. The company has also cut the levels of salt and fat in its own-brand products.

DO WE BELIEVE THEM?

The pledges on bags, recycling and energy are welcome. But Tesco's business model is still based on screwing every last penny out of its suppliers, and trucking or flying food hundreds or even thousands of miles to its shelves. It has not yet convinced campaigners that it is serious about improving health or softening its business methods. Shouldn't it adopt the Food Standards Agency's extensively researched traffic light labelling scheme on diet? Tesco scored just 14 out of 28 on City University's recent health rating of food companies.

McDONALD'S (US)

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£11bn

FRASER RATING

1st

WHY DO WE HATE THEM?

Eric Schlosser, author of the bestseller Fast Food Nation, says McDonald's peddles junk food stuffed with additives, fat and sugar, creates flavours in chemical labs, employs an army of low-paid workers, lowers animal and environmental standards, and lures children in via tie-ins with Disney cartoon characters (below).

WHAT ARE THEY DOING ABOUT IT?

McDonald's has introduced salads and mineral water; kids' meals now come with the option of fries or carrot sticks. Its clown, Ronald McDonald, has been given a healthy makeover, appearing in a TV advertising campaign snowboarding and juggling fruit. The company is also making over its branches as airy cafés.

DO WE BELIEVE THEM?

Punters entering the Golden Arches can now choose from a healthier menu. The mainstay of the business is the aggressive promotion of junk food to children, who receive small toys as a reward for their parents' custom. A Which? report found that many McDonald's salads are still full of calories. Amid falling sales in the UK, McDonald's announced it was still in essence a "burger company" and unveiled the World Cup burger - 40 per cent bigger than a Big Mac and containing 667 calories - almost half the recommended daily total for women.

GAP (US)

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£8bn

FRASER RATING

12th

WHY DO WE HATE THEM?

The world's largest fashion retailer has attracted opprobrium because of its poor record on workers' rights. In 1999, workers in Saipan claimed factories manufacturing for Gap had withheld wages and forced overtime. In Britain, trade unionists found evidence of "abusive working conditions" at factories around the world.

WHAT ARE THEY DOING ABOUT IT?

After repeated denials, Gap eventually published a Social Responsibility Report (CSR) three years ago revealing that many of its contract factories were sweatshops, and 90 per cent failed to meet minimum standards. Contracts were cancelled at 16 per cent of factories. In 2004, the report revealed contracts had been cancelled at a further 15 per cent of factories (below).

DO WE BELIEVE THEM?

Gap has taken a positive step by publicising the conditions for workers in its factories, though there is no publication date for its next CSR. The anti-sweatshop group Labour Behind the Label says: "While Gap, like all clothing companies, is far from resolving all workers' rights issues, it has come further than most."

BP (BRITISH)

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£152bn

FRASER RATING

7th

WHY DO WE HATE THEM?

BP is the world's third-biggest energy company. In the past two years it has been accused of human rights abuses, and destroying wildlife habitats by laying the Baku Ceyhan pipeline through Central Asia. In February, BP oil pipes were implicated in possibly the worst crude spill in Alaska since the Exxon Valdez. The use of oil, particularly for transport, plays a significant role in climate change.

WHAT ARE THEY DOING ABOUT IT?

BP vaunts its environmental credentials and says BP stands for Beyond Petroleum rather than British Petroleum. It points out that gas (another fossil fuel, albeit a cleaner one) now accounts for 40 per cent of its business. It owns a solar power company and is developing hydrogen-powered technology.

DO WE BELIEVE THEM?

BP says the West simply needs the oil from the Baku pipeline, which officially opens on 13 July. The pipeline is laid around the edge - rather than through - national parks. BP has certainly invested in renewable power but has it done enough given the looming catastrophe of climate change? Friends of the Earth says: "BP has invested millions of pounds in telling the world it is going green, but this company's core business is dirty at heart."

NESTLE (SWISS)

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£40bn

FRASER RATING

10th

WHY DO WE HATE THEM?

Baby Milk Action claims Nestlé flouts the voluntary International Code of Marketing of Breastmilk Substitutes (adopted to prevent companies pushing formula milk to mothers in countries with polluted water supplies, where breastfeeding is safer). Which? also claims that Nestlé uses inappropriate techniques to target children. For instance, the Cheerios Animal Play Book encourages children to eat the breakfast cereal by including a picture of a leopard with cut-out spots that children are supposed to fill with super-sweet Cheerios.

WHAT ARE THEY DOING ABOUT IT?

Nestle insists it abides by the rules on baby milk. Amid criticism of the hardships caused by low coffee prices in developing countries, the multinational launched Partners Blend Fairtrade coffee. It has made commitments to reduce salt and transfats. Nestlé is also removing all artificial colours from Smarties including the allegedly unhealthy brilliant blue (E133), quinoline yellow (E104) and sunset yellow (E110).

DO WE BELIEVE THEM?

Baby Milk Action insists Nestlé is still breaking the voluntary code around the world 25 years after it was agreed. Despite Partners Blend, less than 1 per cent of its global coffee purchases are Fairtrade. Nestlé met only 18 of 28 indicators on health in a study by City University. The world's biggest food company has no policy on reducing sugar or portion sizes.

STARBUCKS (US)

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£3bn

FRASER RATING

11th

WHY DO WE HATE THEM?

Creating identikit coffee bars that turn every high street into a clown town. Paying farmers too little for their coffee, thereby contributing to the global coffee price slump that has left farmers from Columbia to Vietnam too poor to afford medicines or schooling.

WHAT ARE THEY DOING ABOUT IT?

Starbucks says it is "respectful of a neighbourhood's desire to preserve its look and feel". Its Corporate Social Responsibility report says it pays above market rates for unroasted coffee beans (an average $1.28 last year - higher than Fairtrade's guaranteed $1.26). It also supports the C.A.F.E. scheme, which has social and environmental standards, as well as Fairtrade. It is testing a paper coffee cup made of 10 per cent recycled material.

DO WE BELIEVE THEM?

Starbucks' corporate responsibility report reveals use of water and electricity per store rose between 2004 and 2005. Starbucks could pay more to impoverished coffee growers, given its annual profits of £264m in 2005. C.A.F.E. coffee accounted for 24 per cent and Fairtrade 3 per cent of Starbucks' beans in 2005. Despite its higher prices, growers in developing countries rarely benefit. The chain pays for shipping, roasting the beans, staffing, advertising, rents and other overheads, but even then the grower receives - on The Independent's calculations from Starbucks' figures - about 6p from a large coffee selling for £2.76.

NIKE (US)

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£7bn

FRASER RATING

2nd

WHY DO WE HATE THEM?

Nike's notoriety stems from campaigns which claim it has an appalling record on workers' rights. Charities accuse the clothing giant of using factories that pay workers a few pence a day in dictatorial states while paying millions of pounds in endorsements to sports stars.

WHAT ARE THEY DOING ABOUT IT?

After years of denying there was a problem and facing boycotts, Nike announced a U-turn last year. It published an audit of 700 factories, which disclosed that a quarter were failing to meet minimum standards. It promised action on pay, hours and conditions. Hans Faber, for Nike Europe, said: "There have been problems... and one of our weaknesses was that we thought we could sort these out on our own."

DO WE BELIEVE THEM?

Campaigners say some movement is being made on workers' rights. The company could do more. A report from Oxfam last month, Offside? Labour Rights and Sportswear Production in Asia, found that the Asian workers who make Nike's football shoes earn 32p an hour (above). Some 38 per cent of its shoes are made in countries where workers have no legal right to join a trade union - compared with 52 per cent in 1998. The report concluded: "In several Asian factories Nike has shown it is willing to co-operate with the Fair Labour Organisation to workers' trade union rights when violations of those rights are brought to the company's attention. However... Nike has in recent years cut orders to factories in Asia where workers have established trade unions..."

What are the Fraser ratings?

The Fraser Ethical Reputation Index seeks to rank companies with high public profiles according to the public's perception of their ethics.

The market researcher Karen Fraser published the index for the first time in May, based on an online survey in March of the views of 1,300 people on 42 major companies. She intends to publish the ranking quarterly.

The Fraser rating on ethical reputation (1st being regarded as least ethical), based on interviews with 1,300 adults:

1 McDonald's

2 Nike

3 Shell

4 Adidas

5 Barclays

6 Coca-Cola

7 BP

8 Camelot (National Lottery)

9 American Express

10 Nestlé

11 Starbucks

12 Gap

13 BT

14 HBOS

15 NatWest

16 Lloyds TSB

17 HSBC

18 First Direct (part of HSBC)

19 Topshop

20 Vodafone

21 British Airways

22 Kraft

23 Disney

24 Friends Provident

25 O2

26 Apple (computers)

27 Microsoft

28 Philips

29 Morrisons

30 Sony

31 Asda

32 Waitrose

33 Tesco

34 Kellogg's

35 J Sainsbury

36 Virgin Group

37 Cadbury

38 Co-operative Bank

39 BBC

40 Marks and Spencer

41 Boots

42 Body Shop