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Impact Investing

IPE special report May 2018

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Sustainability matrix issued by Morley

Morley Fund Management has published a controversial ranking of the largest 100 UK companies’ social and environmental credentials.
A so-called ‘sustainability matrix’ measures the business sustainability of FTSE 100 companies in terms of social and environmental issues. Against this is each company’s management vision and practices on sustainable development and corporate responsibility.
Morley, the CGNU Group’s £107bn (E170bn) asset manager, says the ratings should encourage companies to improve their social and environmental record.
Business sustainability is rated from A to E (fundamentally incompatible with sustainable development) while management vision is ranked between 1 (clear vision of sustainable development) to 5 (incompatible).
None of the FTSE100 members scored a 1 or a 5 but pharmaceutical companies Astrazeneca and Glaxosmithkline achieved the best overall grade of a2. Tobacco companies Gallaher Group and Imperial Tobacco appeared at the bottom of the table with a rating of e4.
Some companies like Diageo and BP scored well on management vision and practice but poorly on sustainability. The converse was true for companies like Reuters and software group Sage.
Morley uses the ratings as a basis for making investment decisions. For its £150m Sustainable Futures Fund, the 45 FTSE 100 companies ranked below c3 are ineligible.

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