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BiE index criteria given tougher new emphasis

November 2000

Criteria for Business in the Environment’s annual index of corporate environmental engagement have been made more stringent.

Survey forms for the fifth BiE Index, which had to be handed in by UK companies last month, asked entrants, for the first time, whether the information they provided had been audited either internally or externally.

Their answers will affect their overall score in the index, which ranks companies according to a range of environmental engagement measures. The resultant rankings will be announced in February.

Companies have also been asked to declare all incidents of ‘unplanned’ emissions to ground, air or water wherever they take place – regardless of whether they are covered by national or international legislation or regulations. Previously the index has only measured incidents that break the law.

The new survey has also been broadened to include a question on how firms are tackling biodiversity issues, which BiE says is ‘an area of growing concern to the public and government and where some industries have a major impact’.

For the first time, leading accountants, lawyers and management consultants have also been allowed to enter the index.

BiE chairman Derek Higgs, who is a director of Prudential, said the changes had been made after consultation with users of the index – particularly investment managers and environmental pressure groups.

He said the index’s previous reliance on self-assessment by entrants rather than some form of verification was ‘a potential weakness’ and added that the survey had been re-designed to give ‘a broader, more accurate and objective picture of a company’s performance and increase the robustness of the data obtained’.

A total of 426 companies were sent survey forms, including the FTSE 350, 16 sector leaders from the Dow Jones Sustainability Group Index, and 60 members of BiE’s sister organization Business in the Community, which are not FTSE-listed. Ninety new entrants to the FTSE 350 since September 1999 were asked to take part for the first time.

Administrators say they have ‘particularly targeted’ industry sectors where last year’s level of participation was ‘exceptionally low’, such as information technology. Only one out of a total of 12 eligible IT companies participated in 1999.

BiE, the business-led campaign for corporate environmental responsibility, developed the index in 1995 to provide ‘credible, independent, comparative information’ on the environmental performance of companies.

Those that take part receive a confidential benchmarking report which allows them to assess how well they are addressing environmental issues on various measures of management and performance. BiE also reports on comparative performance across different sectors.

The best-performing company in the 1999 index, which was published this spring, was Severn Trent (EP11, 2000).




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