Green Leaders: A guide to the world's greenest companies

As companies fall over themselves to parade their green credentials to customers and investors, <i>The Independent</i>, in conjunction with Eiris (Ethical Investment Research Services) presents a guide to the greenest companies in the UK and the world.

Britain's Top Ten

1. Kingfisher

The owner of the DIY-chain B&Q takes the number-one spot due to its ambitious targets for zero waste at stores and exceptional rates of Forest Stewardship Council (FSC) certification of timber. B&Q UK currently sources over 70 per cent of its timber from FSC sources. Europe's largest home-improvement retailer works with WWF and the Tropical Forest Trust on timber sourcing issues. It also has a proactive stance on chemicals. All of Kingfisher's operating companies are required to have an action plan in place by 2008 to identify products containing certain chemicals and work with vendors to investigate opportunities for removal or substitution.

2. BT Group

The telecoms group signed a three-year electricity supply contract in 2005 that provides nearly all of BT's UK electricity from renewable sources and combines heat and power (CHP) plants. In addition, through energy efficiency, BT has exceeded its targets for reducing the use of electricity within its wholesale estate. It also scores highly on green procurement, water minimisation and waste minimisation strategies.

3. Biffa

The only company in the top 10 that is not in the FTSE 100 Index, Biffa provides waste collection, treatment and recycling and disposal services across the UK. It has a strong carbon management strategy in place. This involves capturing methane from landfill and sewage plants for electricity generation in order to achieve an overall capture rate of 80 per cent by 2007/2008. The company aims to continue to increase its self-sufficiency in electricity generation using renewable resources. There are also plans to increase the use of biofuels for its transport vehicles.

4. BP

Despite coming under fire for oil leaks and the Texas City oil refinery blast, the energy giant comes in at fourth place. BP's first target, set in 1997, was to reduce greenhouse gas (GHG) emissions by 10 per cent below its 1990 emissions by 2010. BP achieved its target at the end of 2001. BP was an early critic of the oil industry lobby group, the Global Climate Coalition, which had sought to dispute the evidence of global warming and undermine the Kyoto Protocol. In 2005, BP Alternative Energy was launched to provide low-carbon power generation solutions and, in 2006, BP launched a biofuels business to provide low carbon solutions for transport.

5. Unilever

The consumer goods giant incorporates environmental sustainability into its overall business strategy. It pioneered a zero industrial waste policy, initiated a project to develop an approach towards zero-effluent factories and is rolling out globally applicable agricultural practice guidelines. It participates in a project to develop common approaches to sustainability and is implementing a Sustainable Water Initiative.

6. Severn Trent

The utility company aims to minimise carbon emissions from operational processes and is increasing its self sufficiency in electricity generation by using renewable resources. Severn Trent Water converts the methane from the digestion of sewage sludge into electricity, using combined heat and power (CHP) units, and it has an ongoing programme to increase the number of sewage treatment works with these units.

7. J Sainsbury

The supermarket chain is implementing a number of policies, including on agricultural sourcing, with standards applied worldwide. The retailer also aims to increase its organic products and has policies on local sourcing and on refrigeration and logistics. It also has targets to increase the amount of Marine Stewardship Council (MSC) certified fish on sale in store. The MSC promotes responsible fishing practices.

8. BSkyB Group

The media group encourages the use of environmentally friendly materials, is a member of the Climate Group and was the first major media company to make a commitment to becoming carbon neutral. It aims to achieve this through energy efficiency, energy reduction and carbon offsets. Sky already purchases 100 per cent renewable energy in England and Wales. Its product includes research into an automatic standby facility for set-top boxes.

9. BHP Billiton

The mining group BHP Billiton makes the top 10 due to the fact that, since 2004, it has required full Lifecycle Assessments (LCAs) for all its mineral products. An LCA evaluates the environmental burdens associated with a product, process or activity. The company also participates in major LCA studies of nickel and chrome products.

10. M&S Group

The retailer is committed to taking a lead to use sustainable raw materials for its products. This includes sustainable agricultural sourcing and setting of its own standards, and a commitment to retail-certified organic products. It sources sustainable fish certified to the MSC standard, FSC certified timber for garden furniture and has a policy on packaging, refrigeration and logistics. It recently launched an Ethical Fund.

Global Top Ten

1. Vestas Wind Systems

Vestas is the leading manufacturer of wind turbines in the world. The Danish company has more than 30,000 wind turbines generating electricity globally and its high-tech systems are 80 per cent recyclable. But it has not come top in the global ranking just because of the products it makes. It is also that Vestas sources 68 per cent of its energy requirements from renewable sources. Furthermore, the turbines generate in six to eight months the equivalent energy required to manufacture, transport and take the products down. This makes the turbines carbon neutral within that timeframe.

2. Svenska Cellulosa

The Swedish company SCA makes everything from nappies, sanitary towels and tissues to packaging, papers and pulp. It is Europe's largest private forest owner, all of which is managed to FSC standard and all wood supplied to its mills to produce papers must meet FSC criteria. In addition, the company has a commitment to use a high proportion of recycled fibre in its tissue products. It has clear policies on avoiding illegal logging and others covering water emissions, it is replacing oil and coal with some carbon neutral fuels, such as wood residue and biofuels. SCA also has high rates of waste recovery.

3. ABN-Amro

The Dutch banking group takes the number three spot in the world rankings. A key objective of the company is to integrate environmental issues into all business decisions to ensure its contribution to a sustainable society. The firm's external policy is aimed at predicting environmental developments related to its commercial activities. ABN has developed environmental and social risk policies covering the oil and gas sector, mining, forestry industries, dams and nuclear power.

4. MTR

This Hong Kong-based railway company is a founding signatory of the HK Corporate Social Responsibility (CSR) Charter. It is committed to providing leadership in CSR practices and promoting the principles of responsibility by managing its environmental impacts. The company, which carries an average 2.5 million passengers every weekday, considers the lifecycle of its products through a "cradle-to-grave" approach.

5. Ericsson

The Swedish telecoms group is involved in a Design for Environment programme, which gives product designers guidelines on environmental design with an emphasis on reducing energy consumption. Ericsson also addresses the Waste Electrical and Electronic Equipment (WEEE) initiative, which aims to minimise the impact of electronic goods on the environment by increasing recycling. It has carried out in-depth lifecycle analysis (LCA) assessments in its 3G system which, in independent reviews, have shown a positive environmental outcome can be achieved.

6. Westpac Banking

Sustainability is integral to the Australian bank's values and core business strategy. The company has adopted the Equator Principles, a framework for managing environmental and social risk in project finance. Through BT Financial Group, the bank offers a range of Socially Responsible Investment products.

7. Kingfisher

The highest-ranked British company (see above).

8. Phillps

The Dutch electronics company has a policy of embedding sustainability into its organisation and culture, product design, manufacturing processes and business strategy. Specific sustainability issues addressed include the energy efficiency of buildings, with a goal of zero net energy buildings, energy efficiency and chemical content of products, recycling schemes and lifecycle analysis.

9. BT Group

The second highest-ranked British company (see left).

=10. Matsushita

The Japanese electronics company designs products with improved environmental efficiency and with minimal impact on the environment in mind. It also creates products that solve or address environmental problems.

=10. Sanyo

Another Japanese electronics company, Sanyo incorporates sustainability into its business. It assesses the impact of products by using a product certification system. It has zero emission targets in the areas of greenhouse gases, waste and chemical substance emissions, and evidence that progress is being made towards these targets. The company currently recycles 99.8 per cent of its waste.

=10. ABB

The Swiss electronics company ABB aims to become a carbon-neutral organisation. The company carries out a lifecycle assessment study, including its contributions to global warming and ozone depletion, on all major products. The company aims to increase its use of recycled or reuseable materials.

How the companies were rated

The Independent and EIRIS ranking is based on a wide range of objective criteria. Researchers looked at practices, such as management systems, waste production and water use, and improvements related to climate change. Individual companies' involvement in positive technologies, such as renewable energy, or incidents of serious environmental damage were also studied. Issues specifically related to certain sectors have also been taken into account.

Stephanie Maier, strategic research development manager at EIRIS, which specialises in researching the social, environmental and ethical performance of companies, said: "Drawing on our research of almost 3,000 companies we chose a selection of our environmental sustainability criteria to highlight some of the leaders in the field. These criteria, covering issues such as climate change, reflect some of the key concerns of investors."

The ranking is based on companies in the FTSE All World Developed Index and information is taken from a variety of sources including publicly available company documents and survey responses.

www.eiris.org