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Government drops ethical bombshell on City

01 Jul 1999

The Government today dropped an ethical bombshell on the City in a drive to help create a “decent and modern Britain”. Regulations, announced today by Pensions Minister Stephen Timms, will require occupational pension funds to declare their environmental,social and ethical policies and how they intend to implement them. Friends of the Earth strongly welcomed the new regulations which open the door to protecting the public interest in decisions taken by secretive City insititutions. At present, green and ethical concerns are promoted by only a handful of funds which are too small to exert major influence over business performance.

Friends of the Earth will now spearhead a grassroots campaign to encourage members of occupational pensions to exercise their new rights in ensuring fund policies reflect their concerns about the world in which they live. FOE will also be pressing for joined-up-thinking wi thin Government, the financial services sector and industry to ensure that the right kind of information is available to the public and investment managers to make the decisions people expect. At present, companies report more or less what they want, respect no common standards on environmental and ethical reporting and consequently do only what is required by the law.

Tony Juniper, Policy and Campaigns Director at Friends of the Earth, said:
"For the first time, we will really see environmental and social performance hitting the financial bottom line. Hopefully the day that pension funds start buying and selling a firm's stock because they are worried about its enviornmental and ethical performance compared to its peers is not far off. And when that happens chief exectutives of firms like Rio Tinto, Shell, BP-Amoco and BTwill suddenly realise their environmental and social pronouncements are hard business issues. As for those Chief Executives who are doing nothing, the penny will suddenly drop about what a stakeholder society really means”.