Eco-friendly index finds British companies are lacking

UK COMPANIES are among the worst in the world when it comes to protecting the environment and tackling social issues, according to a new stock market index launched yesterday.

The Dow Jones Sustainability Group Indexes (DJSGI) shows that only one UK firm, the Anglo-Dutch consumer products giant Unilever, beats its sector rivals in the commitment to sustainable development.

The DJSGI - compiled by the US index provider Dow Jones and the Zurich- based consultant SAM Sustainability - is the first index to rank companies according to their environmental, social and economic credentials. It is made up of more than 200 companies around the globe.

However, UK PLC's top executives appear to be less enlightened than their their European, Japanese and North American counterparts.

Canadian managers are among the more receptive to the principles of sustainability, which advocate the integration of ecological, social and corporate governance factors into business strategies. Four out of the 18 DJSGI sectors are headed by a Canadian company, including the steel producer Dofasco and the electrical group Transalta.

German companies also fare well, with Deutsche Telekom topping the telecom sector and BMW leading the car grouping.

The new index family will allow fund managers to construct different products to suit their investment needs. One possibility is an index without tobacco, alcohol and gambling companies, which is expected to be popular with "ethical" funds and investors.