Morley Fund Management publishes Sustainability Matrix

Article date: 13 May 2002

Morley Fund Management (Morley) today releases its firstSustainability Matrix. This Matrix ranks FTSE 100 companiesaccording to social and environmental criteria and provides a newmeasure of business sustainability. These gradings:

  • Encourage companies to improve their Social and EnvironmentalPerformance
  • Protect and increase Shareholder Value by adding another toolfor the analysis of companies
  • For the first time provide clear and transparent analysis ofcompanies' social and environmental policies
  • Encourage and stimulate debate and continue raising awarenessof Corporate Social Responsibility

Keith Jones, CEO at Morley Fund Management, says:

"Morley increasingly believes that companies operating in asocially and environmentally responsible manner will be most likelyto succeed over time. Our Sustainability Matrix breaks new groundin promoting improved performance. It focuses on engagement withmanagement and provides transparent information for investors. Byencouraging companies to improve their sustainability rating we aimto protect and enhance shareholder value."

These ratings are the outcome of over a year's in-depth researchof the FTSE 100 companies by Morley analysts. The Matrix rankscompanies according to Business Sustainability and ManagementVision and Practices

Business sustainability is rated from A to E. An A grade isawarded to companies providing a 'sustainability solution' to majorenvironmental or social issues - such as renewable energy,healthcare and education. An E grade indicates a businessfundamentally incompatible with sustainable development. Companiessuch as GlaxoSmithKline (A2), BG (B2), United Utilities (B2) andPearson (A3) all gain strong grades on product sustainability.

Management vision and strategy is graded from 1 to 5. Companiesawarded a grade 1 have a clear vision of sustainable developmentand are actively working to achieve it. The poorest grade, 5,denotes management policies and practices incompatible withsustainable development and the concept of corporateresponsibility. BP (D2), Shell (D2) and Allied Domecq (D2) gainstrong gradings for management, vision and strategy. No FTSE 100company gains a 1 or 5 grade.

Morley uses the Matrix ratings as a basis for engagement withcompanies to encourage improvement and as a tool to selectcompanies for inclusion in the Morley Sustainable Future Funds.(The stocks in the shaded grey areas can be held in thesefunds).

Clare Brook, Director of the SRI team at Morley outlineshow the Matrix supports the team's future investment strategy:

"Many companies now recognise the long term financial risks theyface by ignoring environmental and social impacts, but believe theCity to be entirely uninterested in sustainable development.Publishing the Matrix will contribute to the debate on thecompatibility between economic prosperity and sustainabledevelopment. It demonstrates for the first time, that the City hasa vested interest in working with companies to develop an economicmodel where sustained returns are rooted in sustainabledevelopment."

-Ends-

For further information please contact: 
  
Morley Fund Management
Daniel Longden, Communications020 7809 8625
Toby Belsom, SRI analyst020 7809 6189
  
Gavin Anderson & Co
Liz Morley020 7554 1479
Lindsey Harrison020 7554 1447
  

Notes to editors

The Sustainability Matrix

Morley SRI Appraisal Matrix: FTSE 100 Companies (CurrentFTSE100 Index) (as at 01 May 2002)

Download the Sustainability Matrix in PDF format here.

How the matrix works:

Business sustainability is rated from A to E. An A gradeshows that a company's core business is a sustainability solution -providing some type of social or environmental benefit. Sectorssuch as renewable energy, healthcare and educational services gaingrade A. An E grade shows the business is fundamentally in conflictwith sustainable development.

Management vision and strategy is graded from 1 to 5. 1is a rating of excellence showing the company has a clear vision ofsustainable development and is working hard to achieve it. Thepoorest grade, 5 shows the business is fundamentally incompatiblewith sustainable development and corporate socialresponsibility.

Why now? Key drivers of corporate uptake of the principles ofsustainable development

Download the table in PDF format here.

What the companies say:
"At BG, we place great importance on providing energy to theeconomies we serve with the minimum environmental and socialimpact. Dialogue with sustainability experts is fundamental if weare to understand fully the expectations society has of energycompanies. Morley's experts contribute to that dialogue, whiletheir sustainability and environmental management matrix bringsvaluable clarity to the analysis."
Margaret Mogford - BG Group plc

An expert advisory panel

The research and ratings process is guided by an independentadvisory committee of leading experts in issues of sustainabledevelopment:

  • Deborah Leipziger, Corporate Responsibility Consultant,formerly European Director of Social AccountabilityInternational
  • Sir Geoffrey Chandler, former Chairman of AmnestyInternational UK
  • Jonathon Porritt CBE, UK Government advisor onSustainability
  • Lord Thomas of Macclesfield, former Chairman of Co-operativeBank and North West Development Agency

About Morley Fund Management

Morley Fund Management ('Morley') is an independently managed,London based, asset management business with over £107 billionunder management. It has investment management operations inLondon, Tokyo and Singapore and an associate office in Boston*.

Morley is a wholly owned subsidiary of the CGNU Group andmanages both institutional and retail funds under the Morley brand.It also acts as investment manager for a range of retail investmentfunds, marketed in the UK under the Norwich Union brand. It aims tobe a leader in Socially Responsible Investment.

CGU plc and Norwich Union plc merged on 30 May 2000 to createCGNU plc, the UK's largest insurance group and one of the top-fiveinsurers in Europe with substantial positions in other marketsaround the world, making it the world's seventh largest insurerbased on gross worldwide premiums.

*Norwich Union Investment Management, a CGNU Group company

Further information about Morley Fund Management can be found atwww.morleyfm.com

Issued by Morley Fund Management Limited.

Morley Fund Management is a business name of Morley FundManagement Limited, registered in England No. 1151805 and MorleyInvestment Services Limited, registered in England No. 1973412.Both are members of the Norwich Union Marketing Group, members ofwhich are regulated by the FSA for life assurance, pensions andinvestments. Morley Investment Services Limited is a member of theInvestment Management Association. Registered Offices: No. 1Poultry, London EC2R 8EJ. Both are CGNU Group companies.

For correspondence please contact us at Morley Fund Management,No. 1 Poultry, London EC2R 8EJ.

Back to top