Article date: 23 June 2003
According to latest results from the Morley FundManagement FTSE100 Sustainability Matrix
Morley Fund Management, one of the UK's largest fund managers,has today announced encouraging results for socially responsibleinvestors in its updated FTSE 100 Sustainability Matrix. DespiteMorley introducing increasingly stringent criteria, the majority ofFTSE 100 companies have maintained or improved their grading in theMatrix.
The Morley Fund Management FTSE100 Sustainability Matrix rankscompanies according to social and environmental risks, liabilitiesand opportunities and provides a measure of businesssustainability. A company’s product is rated from A to E andmanagement practices from
1 to 5.
This year, as Socially Responsible Investment (SRI) continues tobecome more integrated into mainstream investment models, theMatrix has evolved to include corporate governance issues as wellas a greater focus on risk management issues.
This year the Matrix has highlighted that:
- Marks and Spencer (C3-->B2), Standard Chartered(D3-->C2), MM02
(B4--> B2), AB Foods (D4-->C3) and Hilton (D4-->D2) areamong the companies showing the most improvement in the matrixthis year.
- BT (B1), Lloyds TSB (C1), Severn Trent (B1), Scottish Power(D1) and Shell (D1) are the first companies to be awarded‘1’s - in recognition of innovative and sector leadingresponses to key social, ethical and environmental (SEE)issues
- More companies are reporting on material social orenvironmental issues and setting targets for improvement.Currently 72 FTSE 100 companies publish stand alone SEE reportsand a further 18 have statements in their annual reports.*
Gerald Holtham, Chief Investment Officer at Morley FundManagement said:
“We believe it is important to engage with all companiesin the FTSE 100, to encourage best practice in social,environmental and corporate governance matters, in order tomaximise value over the long term for our investors.
“Morley owns over 1% of the UK stockmarket. Fewinstitutions have the access to, and influence over, companies thatMorley does. However with influence comes responsibility. Whileonly a small proportion of our funds are run on SRI criteria webelieve we should use the insights gained from SRI research toengage constructively with all the companies whose shares weown.”
Commenting on these findings, Paul Moody, Head of SRI atMorley said:
“These results demonstrate a distinct improvement incompanies’ awareness and reporting of social, ethical andenvironmental (SEE) issues. We believe that they also indicate thatpressure from institutional investors, like Morley Fund Management,is having a strong influence on affecting corporate change.
“The next challenge for companies is to prove thateffective management of these issues enhances shareholder value. Inorder to do this companies’ should focus on managing social,ethical and environmental issues that have a material impact onbusiness performance, and must demonstrate how these issues areembedded within the business.”
The rationale behind publishing the Matrix is to provide a clearand transparent analysis of companies’ social andenvironmental policies, on the assumption that these impact onshareholder value. It is also hoped it will also stimulate debateand continue raise the bar on social, environmental and employeepractice.
*Source: Ethical Performance, Issue 1, Volume 5, March 2003
For further information please contact:
|Fiona Baker, Head of Corporate Communications|
Morley Fund Management
|020 7809 8617|
Notes to Editors:
The Morley Fund Management FTSE100 SustainabilityMatrix
The Matrix ranks companies according to Business Sustainabilityand Management Vision and Practices. Business sustainability israted from A to E. An A grade is awarded to companies providing a‘sustainability solution’ to major environmental orsocial issues – such as renewable energy, healthcare andeducation. An E grade indicates a business that poses majorchallenges to sustainable development.
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.
Morley’s SRI team uses the Matrix to define the investmentuniverse available to its retail and institutional SRI funds. It isalso used an engagement tool for FTSE 100 companies in whichMorley’s mainstream funds are invested. All companiesincluded were given the opportunity to respond to the team'sanalysis.
Morley’s SRI team
Led by Clare Brook, Morley’s 10 strong SociallyResponsible Investment team is one of the largest and mostexperienced in the UK. The team has grown in reputation and status,with members frequently asked for advice by companies,Non-Governmental Organisations (NGOs) and governmentdepartments.
Morley Fund Management
Morley Fund Management (‘Morley’) is anindependently managed, London based, asset management business withover £104 billion under management (as at 31.03.03). It activelymanages a diverse range of asset classes and employs over 1000personnel worldwide based in London, Singapore, Tokyo and anassociate office in Boston*.
Morley is a wholly owned subsidiary of the Aviva 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 by Norwich Union, and international fundsmarketed under the Privilege Portfolio brand (to change to AvivaFunds on 1st July 2003).
Fund Manager of the Year - Pensions Week Awards 2002
Specialist Manager of the Year - UK Pensions Awards 2002
Insurance Fund Manager of the Year (awarded to Norwich Union) -Standard and Poor’s 2002
Sustainable and Ethical Investment and Asset Management Award -Liveable City Awards 2002
Pensions Management Provider Awards 2002 – Commended for BestSRI Fund Manager and Best Fixed Income Fund Manager
*Morley Fund Management International Limited, an Avivacompany
Further information about Morley Fund Management can befound at www.morleyfm.com/sri.htm
Issued by Morley Fund Management Limited.
Morley Fund Management is a business name of Morley FundManagement Limited, registered in England No. 1151805. A member ofthe Norwich Union Marketing Group, members of which are authorisedand regulated in the UK by the Financial Services Authority forlife assurance, pensions and investments. Registered Office: No. 1Poultry, London EC2R 8EJ. A member of the Investment ManagementAssociation.
Morley Fund Management is also a business name of MorleyInvestment Services Limited and Morley Fund ManagementInternational Limited. All are Aviva companies.
Telephone calls may be recorded for training and monitoringpurposes.
|FTSE100 SUSTAINABILITYMATRIX – 19th June 2003|
|ManagementVision and Practice|
|SMITH & NEPHEW||JOHNSON MATTHEY|
|B||BT GROUP||ABBEY NATIONAL||BOC GROUP||3I GROUP|
|SEVERN TRENT||AMERSHAM||CABLE & WIRELESS||ALLIANCE UNICHEM|
|ASTRAZENECA||FRIENDS PROVIDENT||DAILY MAIL&GEN TST|
|BOOTS GROUP||OLD MUTUAL|
|LEGAL & GENERAL||REUTERS GROUP|
|MARKS & SPENCER||SHIRE PHARMA GROUP|
|C||LLOYDS TSB GROUP||ALLIED DOMECQ||ALLIANCE&LEICESTER||BRITISH SKY BROADC|
|BRITISH LAND||ASSOCD BRIT FOODS||HSBC HLDGS|
|CENTRICA||BRADFORD & BINGLEY||LIBERTY INTERNATIONAL|
|DIAGEO||CADBURY SCHWEPPES||MAN GROUP|
|KINGFISHER||CANARY WHARF GROUP||MORRISON(WM)SUPRMKT|
|LAND SECURITIES||COMPASS GROUP||NEXT|
|MITCHELLS & BUTLERS||DIXONS GROUP||REXAM|
|ROYAL BANK OF SCOTLAND||GUS||WPP GROUP|
|SAFEWAY||NATIONAL GRID TRANSCO|
|SCOT & SOUTHERN ENERGY||RECKITT BENCKISER|
|STANDARD CHARTERED||RENTOKIL INITIAL|
|SCOT & NEWCASTLE|
|D||SCOTTISH POWER||BAA||ANGLO AMERICAN||WOLSELEY|
|SHELL TRNSPT&TRDG||BP||BHP BILLITON PLC|
|IMPERIAL CHEM INDS|
|E||BAE SYSTEMS||BRIT AMER TOBACCO||IMPERIAL TOBACCO|
The matrix excludes some recent additions to the FTSE 100 andsome companies under going significant corporate actions (takeoversand mergers).