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Vodafone is top ethical stock

June 2001

Vodafone heads a league table of UK companies favoured by ethical fund managers, according to the Ethical Investment Research Service.

The mobile phone company has maintained its position near the top of the list, which logs the number of ethical funds with holdings in both UK and international companies. When the table was last compiled, in late 1998, Vodafone came third.

Abbey National and First Group, the passenger transport services group, have also maintained their position in the top 10. Two years ago, Abbey was the most popular company, followed by Railtrack.

However Railtrack has since fallen to 17th place in the ranking. Other companies that are now less popular with ethical fund managers than they were two years ago include BG, Halma and Severn Trent.

Eiris stressed: ‘This does not mean that those companies at the top of the list are best at meeting funds’ ethical policies. The fact a company is not included in a fund does not necessarily mean it is unacceptable in any way.’ Fund managers took other factors into account when making investment decisions such as financial performance, it said.

A City investment bank analyst commented: ‘The composition of the list reflects the weighting of stocks in the UK market, so a benchmark effect is at work here. It also highlights the SRI tendency to avoid oils and pharmaceuticals, and the preference for mortgage banks – as opposed to the main banks – which do not have exposure to environmental liability, arms trade lending and third world debt’.

Eight of the 20 most popular businesses are IT or media companies, three are utilities and four are banks.

The amount of money invested in ethical funds has grown from $3billion (£2.1bn) to $5.2bn in the intervening two years. The survey is published in the summer edition of Eiris newsletter The Ethical Investor.

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