Shortcomings tarnish social responsibility index

THE average investor readily acknowledges that compliance with environmental law is a requirement for listing on the JSE’s socially responsible investment (SRI) index. Yet, despite pressure from the Centre for Environmental Rights and other leading environmental organisations, compliance with environmental law is still not mandatory.

It is therefore not surprising that a number of companies included in the 2013 index feature in the Department of Environmental Affairs’ 2012-13 National Environmental Compliance and Enforcement Report (NECER) for noncompliance with environmental law. These include ArcelorMittal and BHP Billiton, among others.

The JSE states on its website that the criteria for the SRI were developed “to measure the triple bottom line performance of companies in the FTSE-JSE all share index”. It claims to offer an aspirational sustainability benchmark by recognising those listed companies incorporating sustainability principles into their everyday business practices. It also aims to serve as a tool for investors to assess companies’ commitment to environmental, social and economic sustainability and good corporate governance. — Full Story at BDlive

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