gotbeer
Mon, Jun-02-03, 11:53
Ethical investments can be good for the environment and bank balance
ARMCHAIR INVESTOR
Mary MacIssac 6/1/2003
link to article (http://www.scotlandonsunday.com/business.cfm?id=609662003)
[Reference to Atkin's Diet is deep into article - see highlighted section below.]
ON A midsummer day in the 1980s, a group of friends climbed to the summit of the Merrick in Galloway to protest at the proposal to create a nuclear dump in one of Scotland’s sparsely populated and unspoiled areas. The group were not cranks or dropouts but concerned about the potential hazards of nuclear power.
Many investors also care about certain aspects of life and behaviour, so seek out companies they consider fit their particular concerns. At the top of the list of ‘unethical’ companies are those involved in the provision of armaments, gambling, alcohol and tobacco.
Issues such as human rights, environmental destruction, pollution, intensive farming, animal welfare and pornography are also major factors.
Ethical funds were set up by a group of Quakers in the 1980s, and in July 2001 the FTSE4Good index was launched covering four markets - the UK, US, Global and Europe. At present more than 300 firms have passed the strict rules allowing them to be included in the index, although some ethical investors do not agree with all the criteria laid down.
BP, despite being involved in the supply of fossil fuel, is included, while Shell is not. Shell does not pass all the environmental, social and human rights tests. Although it markets itself as a ‘green’ company, it operates in countries where gross human rights violations exist.
Surprisingly two major suppliers of energy, Scottish & Southern Energy and United Utilities, are included in the list of biggest ethical companies. This is because they are increasingly developing renewable energy sources. SSE, valued at £5.57bn and yielding a dividend of 5.7%, intends to spend £450m upgrading its hydro-electric power stations and developing renewable energy schemes.
At the height of the debate on nuclear energy, one side suggested further nuclear power stations should not be built because Scotland had just the right landscape to develop further hydro power stations. The other side dismissed the hydro option because nuclear generation was seen as a cheaper alternative. The Three Mile Island and Chernobyl disasters and the difficulty of waste disposal changed attitudes and hydro power as well as wind, wave and solar generation are now seen as viable, safer alternatives. SSE shares are currently 648p.
United Utilities, valued at £3.33bn, giving a dividend yield of a healthy 8.2%, operates more than 40 green energy schemes. It produces enough power from wind farms and hydroelectric stations to supply more than 75,000 homes. There are plans to increase investment in green energy threefold. Shares are 618p. In the past 12 months both SSE and United Utilities have outperformed the FTSE100 by 25% and 17% respectively.
Last year Alliance & Leicester, the banking group, following publication of its first corporate social responsibility (CSR) report, was admitted to the FTSE4Good index. It, too, outstripped the performance of the FTSE100 over the past 12 months by 17%. The shares are now 838p and the dividend yield is 5.3%.
Reckitt Benckiser, the household products company, deserves its place for its involvement in the community, although I give it top marks for its new environmentally friendly stain remover. Instead of removing stains through hydrogen peroxide (bleach), the active ingredient is oxygen. Don’t ask me how it works, but it does. Not only is the introduction of this wonder product reducing environmental pollution, Reckitt is no longer in debt. It has net cash of £20m. Shares in this £7.8bn company are now 1140p, 16% above the FTSE100 average for the past 12 months. It adheres to strict ethical practices and accepts that business may be lost when standards need to be met.
Unilever, the international food processor, spent more than £9m in 2001 on a variety of environmental and cultural projects. It helped pay for cleaning the River Mersey and sponsored the Tate Modern. For the first time in just over four years, Unilever has not met its sales targets. Sales of Slim Fast have fallen. Hollywood aficionados are hooked on the low to no carbohydrate Atkins diet. I cannot imagine meals consisting entirely of bacon, eggs, meat and cheese - but the stars claim it works. Environmental lobbies must surely condemn the increase in factory farming needed to produce the type of food used by Atkins’ dieters. Surely Slim Fast is ethically more acceptable.
Although Unilever total sales for the first quarter of this year fell, sales of 400 core brands rose by 3%. It is in the throes of a major restructuring. Since cost-cutting began, 30,000 staff have been made redundant and around 100 factories closed. Brand numbers have been cut to 800, of which 400 have the potential for further development. Thirteen top brands now generate more than 1bn turnover a year.
Unilever is a major player in emerging markets, second only to Nestlé, and is a FTSE4Good constituent. Profits have grown by 11% a year compared to growth of 8% in developed countries. The ‘Dove’ name, initially used only for soap, has extended to shampoo and deodorant and is sold in 80 countries. Last year, this Anglo-Dutch company on turnover of 51.2bn made a pre-tax profit of 5.10bn. Shares are 563p.
The Ethical Investment Research Service (www.eiris.org) is a charity group set up in 1983 to provide independent research for investors into the social, environmental and ethical performance of companies around the world. SSE, United Utilities, Alliance & Leicester, Reckitt Benckiser and Unilever pass muster.
ARMCHAIR INVESTOR
Mary MacIssac 6/1/2003
link to article (http://www.scotlandonsunday.com/business.cfm?id=609662003)
[Reference to Atkin's Diet is deep into article - see highlighted section below.]
ON A midsummer day in the 1980s, a group of friends climbed to the summit of the Merrick in Galloway to protest at the proposal to create a nuclear dump in one of Scotland’s sparsely populated and unspoiled areas. The group were not cranks or dropouts but concerned about the potential hazards of nuclear power.
Many investors also care about certain aspects of life and behaviour, so seek out companies they consider fit their particular concerns. At the top of the list of ‘unethical’ companies are those involved in the provision of armaments, gambling, alcohol and tobacco.
Issues such as human rights, environmental destruction, pollution, intensive farming, animal welfare and pornography are also major factors.
Ethical funds were set up by a group of Quakers in the 1980s, and in July 2001 the FTSE4Good index was launched covering four markets - the UK, US, Global and Europe. At present more than 300 firms have passed the strict rules allowing them to be included in the index, although some ethical investors do not agree with all the criteria laid down.
BP, despite being involved in the supply of fossil fuel, is included, while Shell is not. Shell does not pass all the environmental, social and human rights tests. Although it markets itself as a ‘green’ company, it operates in countries where gross human rights violations exist.
Surprisingly two major suppliers of energy, Scottish & Southern Energy and United Utilities, are included in the list of biggest ethical companies. This is because they are increasingly developing renewable energy sources. SSE, valued at £5.57bn and yielding a dividend of 5.7%, intends to spend £450m upgrading its hydro-electric power stations and developing renewable energy schemes.
At the height of the debate on nuclear energy, one side suggested further nuclear power stations should not be built because Scotland had just the right landscape to develop further hydro power stations. The other side dismissed the hydro option because nuclear generation was seen as a cheaper alternative. The Three Mile Island and Chernobyl disasters and the difficulty of waste disposal changed attitudes and hydro power as well as wind, wave and solar generation are now seen as viable, safer alternatives. SSE shares are currently 648p.
United Utilities, valued at £3.33bn, giving a dividend yield of a healthy 8.2%, operates more than 40 green energy schemes. It produces enough power from wind farms and hydroelectric stations to supply more than 75,000 homes. There are plans to increase investment in green energy threefold. Shares are 618p. In the past 12 months both SSE and United Utilities have outperformed the FTSE100 by 25% and 17% respectively.
Last year Alliance & Leicester, the banking group, following publication of its first corporate social responsibility (CSR) report, was admitted to the FTSE4Good index. It, too, outstripped the performance of the FTSE100 over the past 12 months by 17%. The shares are now 838p and the dividend yield is 5.3%.
Reckitt Benckiser, the household products company, deserves its place for its involvement in the community, although I give it top marks for its new environmentally friendly stain remover. Instead of removing stains through hydrogen peroxide (bleach), the active ingredient is oxygen. Don’t ask me how it works, but it does. Not only is the introduction of this wonder product reducing environmental pollution, Reckitt is no longer in debt. It has net cash of £20m. Shares in this £7.8bn company are now 1140p, 16% above the FTSE100 average for the past 12 months. It adheres to strict ethical practices and accepts that business may be lost when standards need to be met.
Unilever, the international food processor, spent more than £9m in 2001 on a variety of environmental and cultural projects. It helped pay for cleaning the River Mersey and sponsored the Tate Modern. For the first time in just over four years, Unilever has not met its sales targets. Sales of Slim Fast have fallen. Hollywood aficionados are hooked on the low to no carbohydrate Atkins diet. I cannot imagine meals consisting entirely of bacon, eggs, meat and cheese - but the stars claim it works. Environmental lobbies must surely condemn the increase in factory farming needed to produce the type of food used by Atkins’ dieters. Surely Slim Fast is ethically more acceptable.
Although Unilever total sales for the first quarter of this year fell, sales of 400 core brands rose by 3%. It is in the throes of a major restructuring. Since cost-cutting began, 30,000 staff have been made redundant and around 100 factories closed. Brand numbers have been cut to 800, of which 400 have the potential for further development. Thirteen top brands now generate more than 1bn turnover a year.
Unilever is a major player in emerging markets, second only to Nestlé, and is a FTSE4Good constituent. Profits have grown by 11% a year compared to growth of 8% in developed countries. The ‘Dove’ name, initially used only for soap, has extended to shampoo and deodorant and is sold in 80 countries. Last year, this Anglo-Dutch company on turnover of 51.2bn made a pre-tax profit of 5.10bn. Shares are 563p.
The Ethical Investment Research Service (www.eiris.org) is a charity group set up in 1983 to provide independent research for investors into the social, environmental and ethical performance of companies around the world. SSE, United Utilities, Alliance & Leicester, Reckitt Benckiser and Unilever pass muster.