FTSE names UK's "carbon leaders"

Unilever, BT and Morrisons were yesterday hailed as three of the UK's greenest listed firms with the publication of a new league table from the FTSE Group ranking the carbon management policies of blue chip firms.

The report hailed Unilever's "superb track record" of reducing emissions, noting that it had cut its carbon intensity by 20 per cent in the last three years and 40 per cent since 1995.

The rest of the top 10 featured Rolls-Royce Group, Centrica, Vodafone Group, Reed Elsevier, Tesco, GlaxoSmithKline, and Marks & Spencer Group.

The league table is based on the performance of firms in the FTSE CDP Carbon Strategy 350 Index, which aims to track the greenhouse gas emission cuts, carbon management policies and climate risks associated with leading listed companies.

The companies were ranked based on a scorecard developed by analyst firm ENDS Carbon that draws on 40 different environmental metrics and information provided by businesses to the Carbon Disclosure Project (CDP) initiative.

Dr Craig Mackenzie, technical director at ENDS Carbon and chief analyst for the FTSE CDP Carbon Strategy Index, said that the league table highlighted how leading companies can deliver substantial cuts in carbon emissions if they make a "concerted effort".

"We hope other companies in the index will measure themselves against these leaders, and aspire to topping next year's ranking," he added.

The report also highlighted how carbon-intensive policies had undermined the performance of some companies within the index. For example, coal-fired power generator Drax faced the highest levels of carbon risk, while low-cost carrier Easyjet was deemed the second-most exposed to carbon risk as a result of the aviation's imminent inclusion in the new round of the EU Emissions Trading Scheme.

In contrast, the report noted that companies operating in carbon intensive sectors, such as Rolls Royce's focus on aviation, could still perform well in the index by signing up to ambitious carbon policies.

"Flying is hardly climate friendly," the report noted, "but unless people are to stop flying all together, we need the most efficient aero engines possible – an area where Rolls-Royce has made big strides."

The report comes just days after FTSE Group announced the launch of two new indices designed to track the climate risks associated with different companies.

David Harris, director responsible investment at FTSE Group said that the company's series of climate-focused indices would make it easier for investors "to take account of the substantial differences emerging between companies in carbon risk and performance".