'Israeli firms show little transparencyon social issues'

Report shows that 39 leading companies don't meet basic criteria for reporting actions in a number of areas, such as corruption and human rights.

cubicle 88 (photo credit: )
cubicle 88
(photo credit: )
A new report has found that 39 of the country's leading companies do not meet basic criteria for reporting their actions in a number of areas ranging from corruption to environmental practices to human rights. The new report by Greeneye, the only company in Israel to specialize in Responsible Investment, was revealed at the first seminar on Responsible Investing in Israel on Monday. Greeneye examined the 39 Israeli companies which joined the FTSE All World Index about a year ago after Israel was upgraded by the index to "developed country" 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 global provider of independent research into the social, environmental and ethical performance of companies, and Greeneye is Eiris's local partner. The main areas the report looked at were: Ethics and bribery, environmental practices, climate change, supply chain, protecting human rights, safety and hygiene, and community service. In all of these areas, there were certain risks to which companies were exposed. Without information from the company, investors had little chance of determining if the company was preparing properly for them or not. According to the report, 30% of the companies basically do not issue reports on any of the issues at all. While half the companies had some sort of environmental policy, only 15% of those policies were adequate to good. Gas and chemical companies undertook inadequate reporting, while food service companies were more prepared. However, real estate companies were totally indifferent to environmental concerns. While two thirds (26 of 39) of the companies had ethical codes available for public perusal, there was not enough discussion of enforcement mechanisms. Therefore, potential investors could not be completely reassured that the company was corruption-free, according to the report's executive summary. Seventeen out of the 26 had detailed ethical codes which prohibited bribery and discrimination. Fifteen companies operated in countries where bribery could be a problem, and only a third of them had policies which clearly prohibited bribery. Only four of the companies even had partial preparedness for the effects of climate change. Ten companies worked in countries with problematic human rights records, but only one claimed to have a policy on how to deal with the issue - but that policy was not publicly available. Only four companies had publicly-available safety and hygiene policies. Two of the four were banks, however, whose risk was low. The report's authors theorized that the overwhelming reluctance to publish reports on these issues stemmed from "lack of confidence and lack of knowledge. Conversely, for those interested in Responsible Investment - only that which is measured is managed."