Recently the Financial Times newspaper wrote about the new FTSE4Good Environmental Leaders European 40 Index created especially for an EIB “green bond”. This index is a selection of stocks from the FTSE4 Good Index with the leading environmental management practices.
Some of the environmental leaders it will include in the index are: Shell, BP, and BHP Biliton. Environmental leaders indeed. Leaders in destroying the environment, possibly. Or certainly aiding and abetting the destruction of the planet by making available to all and sundry as much fossil fuel as they can lay their hands on.
How can an intelligent institution like the Financial Times come to the conclusion that a company like Shell is an environmental leader?
The explanation comes from none other than Paul Makepeace, the Chief Executive of the Financial Times Group. The index actually selects companies based on “best practice” in management approach to environmental impact. “Best practice is about having clear policies, the systems to back those up and the reporting lines in place. That’s what we look to companies to provide.”
Something here does not make sense. The fact that a company has a good system for measuring environmental impact and managing environmental risk has no connection with environmental leadership. To pollute massively and keep a record of it is not good environmental leadership. It is shielding irresponsibility behind a veneer of tables and graphs. To imply that a bad practice is best practice just because it is well documented is only possible in a world which is far more bothered about systems than substance.
It is the same world which would call Hitler a good leader because Dachau had ISO14000 certification.
Mr Makepeace’s explanation hides something else: there are no real environmental leaders among the big quoted public companies; real environmental leaders are small entrepreneurial companies which set the pace well before the big companies catch on. All the big ones are followers. The only problem is that the real leaders are too small to seek glory on the public markets. And no public trading means no index. Better, then, to rename the index to FTSE4 Good Environmental Management Systems (But Actually Rather Dirty) 40 Index.