Munich – On March 15, in Frankfurt am Main, the sustainability rating agency oekom research AG presented its third annual report on global corporate responsibility – oekom Corporate Responsibility Review 2011.
According to Matthias Bönning, COO and Head of Research at oekom research, the events in the Gulf of Mexico and in Taiwan, as well as the debate about data protection sparked off by the Google Street View images, show two things. “Firstly, companies throughout the world are increasingly coming under scrutiny from society in general and from investors. Secondly, no company can now maintain that it knew nothing about, for example, inhumane working conditions in Asia.” Bönning states that such facts are not ‘black swan’ events (i.e., unforeseeable events).
SAP, Henkel and BMW Head DAX 30 Companies
Nonetheless, in 2010, numerous companies from the industrialized nations were still involved in violations of human rights and labour rights or environmental scandals. Of the approximately 3,100 companies in 45 sectors of the economy worldwide that oekom research analyses, only one in six achieves oekom Prime Status.
More than half (56 per cent) still fall a long way short of sustainable management. A good quarter of companies (26 per cent) do at least have the basis for a sustainable management system. Among the nearly 550 companies (18 per cent) with oekom Prime Status, approximately 200 are small and highly-specialized companies from sectors which are very closely linked to sustainability, as, for example, renewable energies or water treatment. Approximately 350 companies come from conventional sectors.
Among the DAX 30 companies, SAP, with a score of 67.0 out of a possible 100, Henkel (65.4) and BMW (64.9) lead the ranking. SAP and BMW also occupy the top spots among the Euro Stoxx 50 companies, followed by Deutsche Telekom (61.8).
For the first time, oekom research has also rated all the companies in the MSCI Emerging Markets. Some of the companies included do not need to fear comparison with companies from industrialized countries as far as their awareness of their corporate responsibility is concerned. These include, for example, the Indian IT services provider Wipro (72.3) and the Brazilian cosmetics manufacturer Natura Cosméticos (63.1). However, to date, only around two per cent of the companies from emerging markets which have been analyzed have been awarded the oekom Prime Status.
Wide-spread Violations of Social and Economic Standards
Long overtime hours, poor pay, inadequate safety conditions at work, severe restrictions on freedom of association – when it comes to the rights of employees, the situation is often quite dire. In particular, companies, which in the course of globalization, work with suppliers from emerging markets, are often accused of paying too little attention to internationally recognized labour standards when selecting partners.
For example, around 50 per cent of manufacturers of consumer electronics and computers have been involved in such violations of employees’ rights, either themselves or through their supply chains. Human rights violations occur in 40 per cent of the mining-sector companies evaluated by oekom research. Antitrust infringements have been substantiated in no fewer than 75 per cent of consumer electronics manufacturers. “As far as the awareness of corporate responsibility is concerned,” says Bönning, “although there are no black swans anymore, there are still plenty of black sheep.”
Pressure from Sustainable Investors Growing
The emerging markets constitute one of the major trends in which sustainability-oriented investors are showing an interest. However, while demand for securities here is rising, there is still a limited supply of suitable issuers. oekom research believes that pressure from sustainable investors will help to bring about improvements in the performance of companies in emerging markets over the next few years.
Overall, the market share and volume of sustainable capital investments rose worldwide in 2010: currently, around eight trillion euros are invested taking environmental, social and governance-related criteria into account, Europe alone accounting for five trillion euros. The bulk of this capital, however, is managed according to rather ‘soft’ sustainability criteria. “Following the impressive volume growth of recent years, the task now is to continue to develop the quality of sustainable capital investments. Only this way can one of the main objectives of sustainable investment be achieved – getting companies to change course toward sustainable management,” says Bönning, summing up the situation.
The study is available for download at:
www.oekom-research.com/index_en.php?content=studien
oekom Corporate Responsibility Review
As an annual report on global corporate responsibility, oekom CR Review documented since 2009 the central developments in sustainable investments and deficits and progress in the integration of sustainability concerns in corporate governance. Important issues are corruption and antitrust violations in law and human and labor rights, protection and preservation of forests.
oekom research – the rating agency
oekom research AG is one of the world’s leading rating agencies in the field of sustainable investment. The agency analyzes companies and countries regarding their environmental and social performance. As an experienced partner of institutional investors and financial institutions, oekom identifies those issuers of shares and bonds which are characterized by a responsible management to the community and environment. More than 70 Asset Manager and Asset Owner relate to the research in their investment decisions on a regular basis. Analyses thereby provided influences currently around 90 billion euros of assets under management. For more information, visit http://www.oekom-research.com.
Source: Oekom Research Press Release dated March 15, 2011.
