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Ten questions plus one to ask your investment advisor.
Sharebrokers and investment advisors are not " Environmental Experts" and neither should they be. But, they are required to gather information about the companies that they advise on regarding its financial record ( Earnings, Asset Backing etc.), its management and any factor that will affectits market price . They, make a judgement on the company on these issues to advise the investor.
. Environmental issues can affect the short, medium and long term profitability of the company andinvestors are now asking from their investment advisors information about the " Environmental Performance" of the companies. A recent survey, contained in "Corporate Reporting-The Green Gap" compiled by the Institute of Chartered Accountants Environmental Accounting Task Force, shows almost 75 per cent of shareholders seek greater disclosure on environmental issues, while only 31 per cent of stockbrokers and analysts seek this type of information from the annual report.
Lou de Leeuw a Chartered Accountant and Chief Executive of Ecobusiness Consultants Pty. Ltd. said that " Shareholders obviously want the environmental information to make their investment decisions, they may think their sharebroker knows only financial information, but the sharebroker receives media reports, annual reports, environmental reports. The adviser should be aware of this information and it is only a small step to provide this information to their customers. Sharebrokers that do will receive a competitive advantage and I believe the investment market will expand to include those investors that have stayed away from investment in any company as they were concerned about the lack of environmental information available and assumed the worst".
These are my 10 questions plus one that can be asked of your investment advisor and how the answer to the question can be used in making your own environmental assessment.
1. What products or does the company, including subsidiaries make ?
Your Assessment
Are they environmentally Positive/Neutral/Negative ?
How does the company view packaging, reducing?, Recycled materials, recyclable materials ?
Are the goods produced needed ?
2. Does the company have an environmental policy ?
Your Assessment
Obtain a copy.
Do they contain real policies or are they only statements of good intent eg. We care about the environment.
3. Does the company have an Environmental Management System ?
Your Assessment
Does this comply with any of the standards eg BS7750( UK), EMAS ( European Community), ISO 14000. ?
Is this consistently applied across the company for all subsidiaries and countries of operation in which it trades ?
4. Does the company produce an Environmental Report that is available to the public ?
Your Assessment
Obtain a copy
Does it deal with the emissions to air, land and water ?
Does it deal with bad as well as the good ?
Does it set targets for improvement?
5. If it does have an Environmental Report is this independently verified ?
6. Has there been any reports in the media about the company and its impact on the environment
7. Has the company complied with legislative requirements concerning the environment ?
Your Assessment
Has it been reported, fined or reprimanded by any authority on environmental issues ?
8. Does the company have any environmental contingent liabilities ?
9. Does the company have a record of resource ( air, land and water ) conservation and preservation ?
10. Is there a director of the company that is responsible for environmental issues ?
11. Has an independent environmental audit been conducted by the company and are its results publicly available ?
