Dutch Sustainability Research presents 2006 report on the sustainability of Dutch companies

Of all major Dutch companies listed on the Amsterdam stock-exchange (AEX), Getronics is the weakest performer and ABN AMRO scores best with regard to sustainability issues. According to the results published, ABN AMRO replaces Philips which ranked number one in 2004 and 2005. Overall, Dutch companies perform well relative to their international peers as do major European companies. Globally, Dutch companies rank 1st on sustainability. They are closely followed by companies from the United Kingdom and France. Hong Kong and Singapore rank worst on sustainability closely followed by Greece and Portugal. These are some of the results of a new report by Dutch Sustainability Research (DSR), published in cooperation with SiRi Company.

Sustainability scores of Dutch companies differ markedly

Dutch AEX companies operate in different industries and provide a wide range of products and services. To compare the performance of AEX companies, the sustainability performance of each AEX company was compared to those of its global industry peers. The sustainability ratings and rankings therefore show how strongly a company out- or under performs its respective peers. The analysis shows that the relative sustainability performance of AEX companies differs markedly. ABN AMRO is the top scorer with a score of 61% above the industry average followed by ING Group and Philips. In part, ABN AMRO scores so well because the attention paid to sustainability by the financial sector in general is still rather limited.

Marcel Jeucken, Head of Institutional Relations at DSR: “It is remarkable that 21 out of 24 AEX-companies outperform their global industry averages of which 16 by more than 10%. These figures show that overall the sustainability performance of Dutch companies is very good if seen from an international perspective.” Companies that score relatively poor include Getronics, SBM Offshore and Vedior.

Highflyers, Lowflyers, Frontrunners and Ostriches

Based on the research methodology used, a company can receive a high relative score because it performs well in terms of sustainability and/or because its peers perform very poor. Marcel Jeucken explains: “We have looked at all major industries and considered the extent to which companies have integrated sustainability issues in their business. We then grouped companies into one of four clusters namely Highflyers, Lowflyers, Frontrunners and Ostriches.” Ostriches are companies with a low or average sustainability performance even though companies in its industry pay generally a lot of attention to sustainability issues. In the AEX, Heineken, Numico and SBM Offshore are considered ostriches. Marcel Jeucken: “In industries where much attention is paid to sustainability, related risks are often high and running behind may impair a companies’ reputation and long-term business prospects.” It is remarkable that the AEX-index includes a relatively large number of Highflyers and Frontrunners.

Performance of top 50 European companies

Similar to the methodology applied to Dutch AEX companies, a ranking was produced of the top 50 European companies (within the Dow Jones Stoxx50© index). In this ranking HBOS of the United Kingdom performs best with a score of 67% above the international peer group in the financial sector. ABN AMRO ranks second with 61%. BP and Philips are the best performing non-financials ranking 9th and 10th position. There are three companies that score below their global industry group averages. These are E.ON, Nestlé, and Suez. Overall, the top 50 European companies perform well compared to their global international peers. Marcel Jeucken adds: “It is interesting to see that the major European companies perform relatively well. One should note though that this is in part due to the high proportion of financials among the major European companies in this index, and this is a sector where overall attention to sustainability is still relatively low. So, out-performance can be achieved with relatively little effort.”

Methodology

The research on AEX companies is based on information and data from SiRi Pro, the web-based corporate sustainability rating tool of SiRi Company. SiRi Pro provides customised corporate sustainability ratings covering a broad range of sustainability themes including Business Ethics, Community, Corporate Governance, Customers, Employees, Environment and Contractors. The sustainability performances per theme are aggregated to a total company score which is then compared to the sustainability scores of other companies in the same industry. The weights assigned to the various themes as well as the weights assigned to individual indicators differ between industry groups. For example, the theme ‘Environment’ weighs more heavily for energy companies than for companies operating in the financial services industry.

(Press Release, Fribourg, June 6, 2006)