Ethical Performance
inside intelligence for responsible business


green firms 'fare better'

February 2000

Further evidence of a positive link between shareholder value and sound environmental performance has been furnished by a new study from the international conservation organization WWF.

A research report from WWF’s Forest for Life Campaign claims to have shown a ‘positive correlation’ between stock market returns in a specific industry sector and superior environmental standards.

In a comparison of eight forestry product companies operating in Scandinavia, it found those that conformed to Forest Stewardship Council (FSC) certification levels managed to achieve a 62 per cent greater investment return between 1994 and 1998. This figure is based on the finding that FSC-certified companies achieved a total investment return of 6200 basis points more than their non-certified counterparts.

Forestry products last year accounted for 15 per cent of Sweden’s annual exports and 22 per cent of Finland’s, according to national statistics.

WWF cautions that the results are ‘not conclusive’ because other factors may have played a role and the sample was small, but says the figures ‘give an indication that companies adopting progressive and environmental standards tend to perform well in the financial market.’

The study compared the underlying financial health of four FSC-certified Swedish companies – AssiDoman, MoDo, Svenska Cellulosa Aktiebolaget and Kinnevik – with four non-certified Finnish businesses – StoraEnso Orj, UPM, Metsaliito Osuuskunta and Stromsdal Oyj.

The study, Sustainable forestry pays, has been produced as part of WWF’s Global Forestry and Finance Initiative, which seeks to influence institutional investors to invest in forestry products companies with good environmental performance. WWF is calling on pension funds to use FSC certification as one of their criteria when making investment decisions.

WWF chief executive Robert Napier said the new evidence ‘suggests that the benefits of certification include product differentiation, price premiums and improved forest productivity’. He argued that although it was initially more costly to improve environmental performance, costs decreased quickly, leaving the company in a competitive long term position.


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