'Israeli firms show little transparencyon social issues'

Breaking news (photo credit: JPOST STAFF)
Breaking news
(photo credit: JPOST STAFF)
A new report has found that 39 of the country'sleading companies do not meet basic criteria for reporting theiractions in a number of areas ranging from corruption to environmentalpractices to human rights. The new report by Greeneye, the only companyin Israel to specialize in Responsible Investment, was revealed at thefirst seminar on Responsible Investing in Israel on Monday.
Greeneyeexamined the 39 Israeli companies which joined the FTSE All World Indexabout a year ago after Israel was upgraded by the index to "developedcountry" status. The companies covered the spectrum from gas to food,real estate, banks and chemicals.
CEO Noga Levtzion-Nadan and her team utilized the Eiris -Ethical Investment Research Services methodology. Eiris is a globalprovider of independent research into the social, environmental andethical performance of companies, and Greeneye is Eiris's localpartner.
The main areas the report looked at were: Ethics and bribery,environmental practices, climate change, supply chain, protecting humanrights, safety and hygiene, and community service.
In all of these areas, there were certain risks towhich companies were exposed. Without information from the company,investors had little chance of determining if the company was preparingproperly for them or not.
According to the report, 30% of the companies basically do notissue reports on any of the issues at all. While half the companies hadsome sort of environmental policy, only 15% of those policies wereadequate to good. Gas and chemical companies undertook inadequatereporting, while food service companies were more prepared. However,real estate companies were totally indifferent to environmentalconcerns.
While two thirds (26 of 39) of the companies hadethical codes available for public perusal, there was not enoughdiscussion of enforcement mechanisms. Therefore, potential investorscould not be completely reassured that the company was corruption-free,according to the report's executive summary. Seventeen out of the 26had detailed ethical codes which prohibited bribery and discrimination.Fifteen companies operated in countries where bribery could be aproblem, and only a third of them had policies which clearly prohibitedbribery.
Only four of the companies even had partial preparedness forthe effects of climate change. Ten companies worked in countries withproblematic human rights records, but only one claimed to have a policyon how to deal with the issue - but that policy was not publiclyavailable. Only four companies had publicly-available safety andhygiene policies. Two of the four were banks, however, whose risk waslow.
The report's authors theorized that the overwhelming reluctanceto publish reports on these issues stemmed from "lack of confidence andlack of knowledge. Conversely, for those interested in ResponsibleInvestment - only that which is measured is managed."