Westpac top-scores on social responsibility

Westpac has top-scored in an international ratings system which ranks more than 2300 public global companies on how they address environmental, social and governance risks. In the FTSE4Good Index Series, Westpac achieved a perfect score along with only three other global entities, Israeli company Bank Hapoalim, French media organisation Vivendi, and UK insurance company Aviva. Australia's overall ranking of 15th out of 26 countries means it's rated higher than the US and Canada, but lower than fifth-placed New Zealand and the seventh-placed UK. Ninety Australian companies were assessed for the ratings, with top performers including IAG, BHP Billiton, Mirvac Group and Tabcorp Holdings. Companies were assessed on how well they manage their environmental, social and governance risks.

The FTSE index series has helped alert corporations to investors’ interest in their social and environmental responsibility, said Professor Thomas Clarke, director of the Centre for Corporate Governance at the University of Technology, Sydney.

“It has already changed some corporate behaviour. The impact of these ratings should not be underestimated,” he said.

He said that managing social and ethical responsibilities is now seen by many companies as part of their overall risk management. But he said the FTSE ratings also have commercial benefits for high-scoring companies by marketing them as socially and environmentally responsible.

“Investors, customers and employees want to be associated with companies scoring well on this index,” said Professor Clarke.

While Westpac gained top score in the FTSE4Good Index Series, ANZ was today criticised by environmental group Greenpeace for providing financial support to the coal industry.

“Despite boasting about their sustainability awards, ANZ is the biggest financer of pollution in Australia. Their hypocrisy is striking in light of the damage its choice of investments is doing to the environment and people’s health,” said Greenpeace campaigner Trish Harrup.

But Stephen Ries, spokesman for ANZ, said its project finance energy portfolio is starting to shift from coal to alternative sources of energy. Renewable energy projects represent one-third of ANZ’s portfolio, he said.

“We recognise the importance of coal in Australia's energy security while transitioning to a lower carbon future,” he said.

Published online: 7 April 2011

http://www.sbs.com.au/news/article/1515451/Westpac-top-scores-on-social-responsibility