Ethical Performance
inside intelligence for responsible business


firms lose marks through poor public disclosure

March 2004

Companies are failing to give enough favourable detail when they make public their social and environmental performance, an investor-sponsored study of UK housebuilders suggests.

When the performance of the sector’s 13 largest listed firms was assessed purely on the information they publicly reveal, they scored an average of 35 out of 100. But when researchers followed up with meetings that revealed more information, the score rose to 47.

Insight Investment and WWF, which carried out the joint survey, say the companies are ‘doing themselves an injustice’ by not reporting fully on their sustainability achievements, which in all cases were better than first thought.

The greatest improvement was at George Wimpey, whose rating more than doubled from 23 to 54. Countryside Properties, the highest-ranked, scored 92 after the meeting, compared with 73 before. WWF said most of the companies were simply not reporting all they were doing and that the quality of disclosure in the sector ‘was very variable and could be improved’. FTSE4Good, which collects information on companies for its SRI indices through Ethical Investment Research Services, said the survey showed the importance of ratings agencies, investors, index providers and analysts talking directly to companies about their social and environmental performance, rather than just relying on information in the public domain.

Hilary Sutcliffe of the Shared View consultancy said: ‘This shows the worth of publicly disclosing as much information as possible, but if investors are doing their research properly then they should be doing it from the ground up, not relying just on public documents.’

The housebuilders performed best on governance and risk management. Their work on environmental impact was weaker, and progress was slowest on their social impacts. Countryside, Berkeley Group and Taylor Woodrow had the best overall performance marks, while Barratt Developments, Bellway and Wilson Bowden had the worst.


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