8/14/2019 2010-02-14 - Companies fail UNs Global Compact

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Companies fail UNs Global CompactBy Steve JohnsonPublished: February 14 2010 09:32 | Last updated: February 14 2010 09:32

Scores of listed companies are failing to honour their commitments to be more transparent about their activities,according to a coalition of investors with $1,800bn (1,150bn, 1,322bn) under management.

The grouping says 86 public companies that pledged to meet the reporting requirements of the United NationsGlobal Compact which stipulates a mandatory annual report on their environmental, social and corporategovernance activities have failed to do so.

The move comes as 55 companies have been delisted from the Global Compact for their failure to file an ESG reportlast year. The list includes Visteon, Global Alumina and Lionbridge Technologies of the US, Spice of the UK andAltana of Germany, although most of the delisted companies are from the developing world, particularly Pakistan,China and Mexico.

There are a lot of companies that have made very public commitments to report progress with the compact. If theydont follow through with this, that hasnt reduced or mitigated risk, it has actually raised it. It raises the question asto whether it is a proxy for bad management, said Steve Waygood, head of research and engagement at Aviva

Investors, a member of the coalition, alongside groups such as Nordea, Newton, Robeco, Co-operative and the NewZealand Superannuation Fund.

Im quite staggered some of these companies have let it go as far as they have.

Mr Waygood suggested some companies might simply be engaging in greenwashing paying lip service toenvironmental issues or bluewashing signing up to UN initiatives merely to appear aligned with the organisation,which has a blue logo.

He added Aviva might look at tabling resolutions at the annual general meetings of recalcitrant companies.

Decisions to sell stock are in the hands of portfolio managers, but an unwillingness to honour commitments mayinform views as to the quality of the board, Mr Waygood said

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