Top performing water companies are also top for environment
Water and wastewater companies with the highest environmental ratings also perform the best financially, according to a study by Innovest Strategic Value Advisors.
British-based companies, Severn Trent Plc, and AWG Plc, and the French company, Vivendi Universal, received the highest Innovest EcoValue 21 environmental performance ratings, and the report predicts that they will outperform the rest of the water and waste management sector in the future.
According to Innovest, which analyses more than 60 aspects of environmental risk, management quality and business development, as a group, companies in this sector receiving above-average EcoValue ratings outperformed those with below-average ratings by 4.5% over the past three years.
Forward-looking companies in this sector benefit from environmentally driven regulations by developing technological solutions at the lowest possible cost, states the report, which points to environmental performance being a strong indication of management quality. Competitive companies, says the report, are expanding into environmentally driven business by integrating the operation of water supply and waste management services.
The results of this study reflect that of research published last year by the Institute for Operations Research and the Management Sciences (INFORMS), which found that in the US, firms choosing to employ their own strict global environmental standard had an individual value of approximately $10.4 billion higher than those using less stringent US standards (see related story).