Unilever tops lucrative sustainability index for fifth year running
Sustainability Index (DJSI) in the food production category, an
assessment that could prove lucrative.
"The successful execution of its sustainability strategy positions Unilever among the leaders of its industry," said a Dow Jones analyst. "This is supported by Unilever's high level of engagement across all three corporate sustainability dimensions - economic, environmental and social."
The assessment is a highly significant indicator to investors. The annual review directly influences the investment decisions of asset managers in 14 countries who have licensed the DJSI family as objective benchmarks for a variety of sustainability-driven portfolios.
In total, these licensees currently manage close to €3 billion in DJSI-based funds,structured products, segregated accounts as well as an exchange traded fundthat is listed on Euronext.
In any case, the DJSI assessment shows that Unilever's sustainability strategy has positioned the firm as the clear environmental leader within its sector. The DJSI commended initiatives in the fields of fisheries, sustainable agriculture and water care.
For example, one third of all fish products now originate from sustainable sources. This figure is expected to rise to 75 per cent by 2005, albeit lower than the previous target of 100 per cent, which was set within the sustainable fisheries initiative started in 1996.
Unilever has also developed and published good agricultural practice guidelines for the five crops, palm oil, peas, spinach, tea and tomatoes providing guidance for the entire food manufacturing industry. The company is also one of the three founding members of the Sustainable Agriculture Initiative (SAI), launched in 2001 as a food industry platform to advocate sustainable agricultural practices.
And in response to rising consumer demand for healthy living options, Unilever has strengthened its focus on offering food solutions that help consumers managetheir health or even contribute to a healthier lifestyle.
This is the second accolade that Unilever has won for environmental responsibility. The business was also recently ranked third out of the top 100 'companies that count' for corporate responsibility in the second CR Index, published early in 2004 in the UK by Business in the Community (BITC), an independent business-led organisation.
The group also led the food producers and processors sector of the Business in the Environment Index - BITC's annual survey of corporate environmental engagement - and was placed in the Premier League of companies with an overall score greater than 95 per cent.
Danisco came second in the Dow Jones Sustainability Indices for the Food Industry, and scored particularly high in the social dimensions of the survey compared to previous years.
"This is the third year in a row that Danisco has been included, and we are the only food company in Scandinavia to be chosen," said Søren Vogelsang, vice president, sustainable development, Danisco.
Factors as different as new ERP systems offering an overview of gender and age groups in the company, as well as e-learning and databases giving all employees better access to knowledge, contributed to Danisco's strengthened position within the Food Industry category of the index.
In general, the DJSI found that ?policies and practices across the industry are increasingly expanding to cover supply chain management. Key aspects include the definition of environmental and social standards and external audit procedures for suppliers. In addition, sustainability reporting is being increasingly integrated in annual reports, while external verification as well as implementation of internal assurance systems is also spreading.
Regionally, Japanese firms take the lead in environmental management andperformance. They have also shown the greatest increase in terms ofparticipation in this year's annual review. Compared to 2003, the number ofJapanese companies taking part in the DJSI assessment has gone up by 40 per cent.
European companies set best practice with regard to environmental and socialreporting as well as labor indicators and human capital development. Americaleads in the area of codes of conduct and compliance, while Australia ranks ontop in corporate governance.
Launched in 1999, the Dow Jones Sustainability Indexes are the first global indexes tracking the financial performance of the leading sustainability-driven companies worldwide. Based on the cooperation of Dow Jones Indexes, STOXX Limited and SAM, they provide asset managers with reliable and objective benchmarks to manage sustainability portfolios.
"The rising interest of investors, companies and other stakeholders in the DowJones Sustainability Indexes is an encouraging feedback for us," said Alexander Barkawi, managing director, SAM Indexes. "Since the last annual review DJSI-based assets have increased by nearly 30 per cent to close to €3 billion.
"And in view of the growing amount of assets that investors are putting behind the DJSI as well as the public recognition of these benchmarks, more and more companies perceive the indexes as an incentive for continuous sustainability improvements. In fact, we are seeing a growing number of firms integrating DJSI membership into their sustainability objectives."
