Revealed: how Good the FTSE 100 REALLY are

Written by Lori Campbell on 14th Jan 2020

The FTSE 100 companies have been ranked for the first time for their commitment to people and the planet.

The Responsibility 100 Index, created by Tortoise Media, measures the FTSE 100 companies’ performance against the UN’s 17 Sustainable Development Goals. These cover key social, environmental and ethical objectives such as carbon reduction, gender equality and good business practices.

The new Index exposes the difference between what companies say they do and what they ACTUALLY do. Alexandra Mousavizadeh, Partner at Tortoise Intelligence, said: “It is two minutes to midnight and we need this Index to identify the gap between PR talk and real action.”

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The Index reveals that 3.1 million FTSE 100 employees work for companies that have not committed to paying them a UK Living Wage of £9.30 an hour. It comes as a separate new study showed top bosses in the FTSE 100 would have earned the average annual wage by 5pm on January 6.

In 2018, 419 million tonnes of CO₂ was released by FTSE 100 companies – 55 million tonnes more than that produced by the entire population of the UK, according to the Index. Despite the critical threat of climate change, nearly a THIRD of FTSE 100 companies have a rising carbon footprint.

While many of the big companies claim to be socially and environmentally responsible, they aren’t putting their money where their ethical pledges are. For every £1,000 earned, the average FTSE 100 company spends just £1.39 on charity or community projects.

Unilever comes out top of the list of most responsible companies, followed by beer and spirits producer Diageo, and Vodafone Group. Bottom of the pile, meanwhile, are Scottish Mortgage Investment Trust, sales and marketing group DCC plc and buyout specialists Melrose Industries.

The FTSE 100 includes the largest companies incorporated in the United Kingdom. Together they employ four million people across a network of 20,000 subsidiaries which span every sector and operate in more than 100 countries. In 2018 their total revenue was more than £1.7 trillion. This means their behaviour affects millions of people in Britain and around the world.

The top 10: 

1. Unilever
2. Diageo
3. Vodafone Group
4. British Land
5. AstraZeneca
6. RELX
7. WPP plc
8. ITV plc
9. GlaxoSmithKline
10. BT Group

 

The bottom 10: 

91. Hikma Pharmaceuticals
92. DS Smith
93. International Airlines Group
94. Evraz
95. easyJet plc
96. NMC Health
97. Intertek
98. Melrose Industries
99. DCC plc
100. Scottish Mortgage Investment Trust

 

Unilever is commended by the Index for its responsible practices. It has nearly 50/50 gender representation at senior management level, sends zero waste to landfill in the top 21 countries it operates in and has the lowest levels of energy consumption per employee.

Sage Group is the humblest company in the FTSE 100. It sits in the top 10 after taking strong action to advance social responsibility, yet it is in the bottom 10 for talking about it.

Meanwhile, Melrose Industries stands out for its lack of transparency. It failed to report on over two-thirds of the data points looked at by Tortoise Media, staying silent on areas such as employee diversity, training and wellbeing.

Auto Trader is the biggest riser since the Index was released in Beta form in September. It has risen from 96th position to 27th place, thanks mostly to the Index now incorporating data relating to employee wellbeing and satisfaction, both areas where the company scores highly.

Lloyds is the highest ranked bank, Barratt Developments is the best placed construction firm, SSE PLC is the leading energy company, Tesco is the best performing supermarket, and Severn Trent is the most responsible utility provider.

The United Nations’ 17 Sustainable Development Goals were introduced in 2015 with 169 targets “to achieve a better future for all” by 2030.

The Index uses more than 10,000 data points and 111 indicators to measure how far Britain’s biggest companies fulfil their responsibilities to both people and the planet. To encourage businesses to improve their rankings, the Responsibility100 Index will be published quarterly.

Mousavizadeh said: “We want to see the FTSE 100 start a race to the top. The appetite from consumers, clients and shareholders for irresponsible corporate behaviour is diminishing.”