Good governance companies - taking a sector view
For companies that do not naturally fit into the Socially Responsible Investment team's green investment themes, we look at how they manage their key environmental and social issues on a sector basis. Each sector will have different issues that need to be tackled and we evaluate each company and sector on its individual merits. Below we highlight some of the issues that companies are facing in two relevant sectors: 

 Banking 
 Telecommunications

Banking

Banking on responsibility

• Banks affect almost every aspect of our lives and without them the economy could not function. 
• Banks are major lenders and investors and the extent to which banks consider social and environmental issues in their lending and investment decisions is under increasing scrutiny.

Financing socially and environmentally responsible projects
Barclays and Standard Chartered are signatories to the 'Equator Principles' - a voluntary industry framework developed to ensure that the projects they finance are developed in a manner that is socially and environmentally responsible. Measures such as these are helping to introduce accountability for the longer term impacts of commercial projects into lending agreements.

Focusing on the risks and opportunities of climate change
HSBC is making headway with its climate change strategy and in 2006 it became the first bank to go 'carbon neutral'. The company has since hosted a 'Green Sale' which involved the bank making a £2 donation to environmental charities for every product it sold. It has also appointed Sir Nicholas Stern, the author of an influential government report on climate change, as a special adviser on the issue.

Royal Bank of Scotland (RBS) is working hard to engage with its employees to improve their understanding of climate change. The company recently launched 'Your World', an intranet site packed with relevant information, employee offers and a carbon footprint calculator. The initiative even provides financial incentives for employees to travel by public transport to work rather than in their car.

Access to financial 'literacy' initiatives
Barclays, HBOS and LloydsTSB are promoting better access to financial services and financial 'literacy', through initiatives such as simplified bank accounts, access to account services via local post offices, as well as lending to social entrepreneurs and community groups.
RBS is also addressing financial exclusion issues by providing basic bank accounts which give the account holder full access to branch and counter services and the ATM network.

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Telecommunications

Being socially engaged

• Whilst the telecommunications sector continues to expand - allowing more people to connect and creating new markets and social networks - it can also significantly reduce our carbon emissions.
• Broadband and mobile telecommunications mean that we are able to work almost anywhere including at home.

Reducing carbon emissions through conferencing
Tele- and video-conferencing allow international meetings to take place without leaving the office, leading to significant reductions in carbon emissions. BT has used its conferencing services to reduce travel and energy use leading to a productivity gain of £229.3 million. Face-to-face meetings were reduced by 850,000, equivalent to a 90,000 CO2 reduction. BT is now developing a carbon auditing service for its customers.

Bridging the 'digital divide'
Leading companies are bridging the 'digital divide' by providing affordable services for individuals in markets with low income and restricted access to communications. Vodafone sells a US$25 handset in emerging markets and is keeping service charges low by minimising its network roll-out costs. Projects in Kenya and Tanzania highlight that mobiles allow individuals to join the market economy and help drive entrepreneurship.

Protecting children
However, as the services on offer expand into social networking via the internet, there are new and wider risks to be managed such as virtual bullying and children's access to adult services including pornography, violent games and gambling. As well as imposing an '18' certificate on adult content, Vodafone works with local authorities, teachers and parents to improve education around the issues associated with virtual bullying. Meanwhile BT's position on child pornography is one of no tolerance and it has developed CleanFeed, a software filtering system that blocks access to child abuse websites blacklisted by the Internet Watch Foundation.
 
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Note: Parallel research into financial, environmental and social performance of companies is an ongoing process. Companies mentioned are not necessarily held by our funds and our assessment of their environmental and social performance may also change.