European rating for 2001October 2000
Plans for a sustainability index that rates the social and environmental performance of European companies have been announced by a Dutch company.
The Trilogy index, launched by Amsterdam-based Fair Ventures, will begin by rating European energy and power companies in January 2001. The first results of the ratings are expected around mid-2001.
It will then move on to assess other industry sectors in 2002, with food processing and chemical industries likely to be next in line.
Thierry Sanders, director of Fair Ventures, said the ratings system had been designed as a European alternative to the Domini social index, which is confined to US companies, and the worldwide Dow Jones Sustainability Group Index, which was launched last year (EP6, 1999).
'This will be European and more sector-focused,' he said. 'The existing ratings systems are not sectoral in their approach and therefore they do not really compare like with like', he claimed. 'They also ignore companies that are not publicly listed, which we shall not do.'
Trilogy expects the ratings and the database of information collected while compiling them will be used by fund managers, companies deciding on mergers and acquisitions, NGOs and consumer groups, government ministries and the companies themselves.
'We hope those businesses that we rate will use the data we collect to help improve their performance and their rating,' said Sanders. 'That way they will get something back out of the process.'
Trilogy, which has been launched with Û2.5million (£1.5m) of venture capital and will have 12 staff, plans to analyse information on the social, environmental and financial performance of companies using a software package developed for this purpose.
Companies will be assessed on factors such as their contacts with stakeholders, their community investment levels, emissions to the atmosphere and employee retention rates. AAA will be the top rating and BB the worst.
Fair Ventures, which specialises in promoting sustainability, will also develop a related web site and other spin-off services such as stakeholder analysis, research work for companies and various publications.
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