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Sustainability of international corporations: European companies significantly ahead of US counterparts 

oekom research publishes annual report on corporate environmental and social responsibility

 

Munich/Paris, 15 April 2015 – The independent sustainability rating agency oekom research has examined the sustainability performance of companies and, in the light of the current debate about the TTIP free trade agreement, has drawn up a comparison of European and US companies. The results are published by oekom research in its “oekom Corporate Responsibility Review 2015”, presented today in Paris.

Against the backdrop of the current debate about the TTIP free trade agreement, oekom research has undertaken a review of how environmental and social responsibility differs between European and US companies. The European companies achieved an average rating of 40.6 on a scale from 0 to 100 (highest score), while companies based in the US managed an average score of just 25.2, i.e. a significantly lower figure. In sectors where the volume of goods and services exchanged between the two economic areas is particularly high (e.g. in the automotive sector, the machinery sector and the chemicals industry), European companies also performed better in terms of sustainability. Critics of the TTIP treaty fear that it will lead to social and environmental standards converging at the lower level. Should this prove to be the case, it will be interesting to see what impact it will have on sustainability management in European and US companies.

The overall rating of the sustainability performance of large listed international companies based in industrialised countries has remained quite stable in recent years. However, almost half the companies (49.7%) demonstrate little or no engagement in the area of sustainability. This proportion is down by 3.4 percentage points compared to the previous year. The reason may be that transparency about environmental and social engagement has improved somewhat, especially in companies which were previously lacking in transparency. Nonetheless, fewer than one in six companies (16.3%) meet the minimum sector-specific sustainability management requirements defined by oekom research and have been awarded oekom Prime status.

In an international sectoral comparison of sustainability management performance, manufacturers of household products achieved the highest rating. Companies in the automotive industry took second place in the sectoral rating. Languishing at the bottom of the rankings were the retail and oil & gas sectors and the real estate sector. It is noticeable that even the best industries failed to achieve as much as half of the maximum possible score, with most sectors not even managing to obtain a third of the available points.

The sectors in which companies were most frequently in breach of at least one of the Principles of the UN Global Compact were the metals & mining industry and the oil & gas sector. More than one in three companies were shown to be in breach of the Principles, with environmental and human rights violations being most frequent. Following in third place among the industries with the most frequent breaches was the textile industry, in which around one in five companies (20.7%) are involved in breaches of the UN Principles. Breaches here are principally violations of labour rights and occur mainly in the supply chain.

Matthias Bönning, COO and Head of Research at oekom research, sums up the findings as follows: “Compared with the previous year, we have seen companies making a small amount of progress in tackling environmental and social challenges. However, given the huge global problems and the consequent need for action, this will certainly not be enough."

The socially responsible investment market provides an important impetus for instigating the changes in the corporate sector that are essential for the sustainable development of the economy and society. Companies cannot fail to be impressed by sustainable investment’s record volume of almost ten trillion euros in Europe alone and by its 30.2 per cent share of the global capital market. “The incentive for companies to structure their sustainability management systems in line with investors’ requirements increases with each euro invested sustainably,” says Matthias Bönning.

 

oekom Corporate Responsibility Review 2015
The oekom Corporate Responsibility Review is an annual report on global corporate responsibility which since 2009 has been documenting the key developments in sustainable capital investment, as well as problems and progress in the integration of sustainability criteria into company management. The ratings relate to 1,600 major companies based in industrialised countries and operating internationally that form part of oekom research’s overall universe, which comprises a total of 3,500 companies.

 

Download "oekom Corporate Responsibility Review 2015“

 

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Further information can be obtained from:
oekom research AG, Ines Markmiller, Senior Manager Corporate Communications, Goethestraße 28, 80336 Munich, Germany, phone: +49-(0)89-544184-60, fax: -99, markmiller@oekom-research.com



oekom research
oekom research is one of the world’s leading rating agencies in the field of sustainable investment. The agency analyses companies and countries with regard to their environmental and social performance. oekom research has extensive experience as a partner to institutional investors and financial service providers, identifying issuers of securities and bonds which are distinguished by their responsible management of social and environmental issues. More than 100 asset managers and asset owners routinely draw on the rating agency’s research in their investment decision-making. oekom research’s analyses therefore currently influence the management of assets valued at over 600 billion euros.

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