Calvert Group, Ltd. and KLD Research & Analytics, Inc. have announced that they will use membership in the U.S. Environmental Protection Agency's (EPA) National Environmental Performance Track program as a criterion in developing their investment ratings.
Ratings are used by investors to help make informed investment decisions. Positive results can increase investor confidence, strengthen brand recognition, and boost stock prices.
In 2003, Innovest Strategic Value Advisors became the first investment firm to use Performance Track membership as a criterion in its ratings. Calvert now monitors Performance Track membership to identify potential companies to include in its socially responsible mutual funds. KLD uses Performance Track data to assess how well companies prevent pollution and eliminate wasteful byproducts. The interest of these companies indicates a growing trend toward socially responsible investing.
"Investment advisors have discovered that environmental performance can be an excellent indicator of stock market potential, "said Chuck Kent, EPA Director for the Office of Community and Business Innovation, "and Performance Track members represent many of the top environmental performers in the United States today."
The program started in June 2000, and today 344 companies are members of Performance Track, including 3M, Anheuser-Busch, BMW, Clairol, Dow, E.I Du Pont de Nemours, IBM, International Paper, Johnson & Johnson, Lockheed Martin, Motorola, Nestle, Pfizer, Raytheon, Ryder Transportation, Snap-On Tools, Syngenta, Texas Instruments, U.S. Borax, Unilever and Yamaha Motors.
To qualify for a Performance Track designation companies must meet a complex set of criteria including compliance with legal requirements and voluntary commitments, pollution prevention, continuous improvement in environmental performance, including areas not subject to regulations, and sharing information on environmental performance with the community.
Performance Track facilities voluntarily exceed regulatory requirements, implement environmental management systems, work closely with their communities, and make three-year goals to protect the environment and public health.
Kent says the EPA is willing to cooperate with other investment firms to encourage the development of programs that promote environmental protection, although the EPA cannot endorse the purchase or sale of products or services of any specific investment firm. Find out more about Performance Track criteria online.
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