FTSE4Good not quite so good

BP has been taken out of the FTSE4Good Index, however in contrast to United Parcel Service, DuPont and Bridgestone, it has not simply been ‘deleted’, it has been ‘suspended’. The difference is purely semantic, as, in order to qualify for re-inclusion, BP has to go through the same assessment as the other companies. So, with this ‘unprecedented’ measure following, the index is simply making a point.

Fair enough? Perhaps BP does deserve to be singled out for the failings that led to the oil spill in the Gulf of Mexico. However, by making such a show of suspending BP, the index is also highlighting the problems inherent in its criteria for inclusion. According to David Harris, Head of Responsible Investment at FTSE, the FTSE4Good committee had taken the decision following a review of the number of past events that had taken place and BP’s poor response to their aftermath. Therefore, why is it only now that BP’s inclusion has been called into question?

Perhaps the FTSE4Good committee should also consider suspending and reassessing its own criteria to ensure that it maintains its credibility and continues to contribute to the development of responsible business practice worldwide.

We bonus against sustainability...until it looks like we won't get our bonuses

One of the key questions when it comes to true business sustainability is whether it is part of the way a company remunerates its staff. If all the drivers related to the way you pay and bonus your staff are short term in nature, it is fairly likely that the only results you will see emerging from your staff will be short term. Just take a look at the financial sector if you need a clue to what happens when you reward short termism!

So when you see a company who has incorporated sustainability metrics into the way they reward their staff, it may make you think that they are on the right track. Surely once you have made a public commitment to a metric you should stick by it.

Not so if you are Shell. This is taken from their 2009 Sustainabilty Report:

"Shell uses a number of key indicators to evaluate the company’s overall performance across financial, operational and sustainable development (SD) areas.This evaluation is then used to determine bonus levels for employees, including members of the Executive Committee. Sustainable development accounted for 20% of the scorecard for 2009. As in previous years, safety was the key measure,supplemented by other aspects of HSSE & SP performance.For 2010, an assessment by the Dow Jones Sustainability Indexes of our performance in sustainable development will account for half of the SD element in the scorecard for members of the Executive Committee.Successful delivery of major projects will be part of the scorecard for all employees, with early engagement with communities one factor considered."

Having just been dumped out of the Dow Jones Sustainability Index, Shell is now believed to be reviewing whether this is used as a bonus metric, with claims that the rejection from the Index was subjective. I'm sure if they were not out of the Index and the bonuses got paid we would not be hearing complaints about how subjective it was. Rather than kicking up a fuss about how subjective the measure is, surely they should be working hard to get back on the DJSI.

I, for one, would certainly have more respect for Shell's corporate sustainabilty commitments if they stood by them accepting that perhaps this year bonuses weren't going to be as high as previous years, but this has flagged that there needs to be more real focus on the long-term impacts the company has on society and the environment.

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Fixing the leaks in a global debate

Water is storming its way up the sustainability agenda – and with good reason.

Almost one billion people don’t have access to safe drinking water, and 2.6 billion lack basic sanitation – that’s well over a third of the world’s population.

Last week, the UN insisted that unless we pay attention to the global water crisis, the Millennium Development Goal for environmental sustainability will be missed.

Surely such water issues don’t have anything to do with soggy Great Britain! Well, they do actually. Water is a local issue on a global stage – affecting our economy, our security, our environment and our global impact. Why? Because it’s not just about the liquid in our taps. It’s about the water used by other countries to produce the goods we buy, the food we eat, the bottled water we enjoy. It takes 3 litres of water to produce your 1 litre bottle of water. No wonder water is being called 'the new oil'. The team at The Story of Stuff have created this brilliant video about the issues.

Raise a cheer, then, for Paris. The city has unveiled its latest tactic to persuade Parisians off bottled water: a public drinking water fountain offering free sparkling water. It's called Petillante - "she who sparkles". Let's hope it sparks similar innovation across the Channel.