LSE brands its motley herd green

What do cardboard boxes, plastic pipes and genetically improved pigs have in common?

  • By Jon Hay
  • 10 Oct 2019
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They are all green businesses — according to the London Stock Exchange, which today launches a new label for companies listed on its Main and Aim markets.

The Green Economy Mark is a badge for companies that make at least half their revenues from “products and services that contribute to the global green economy”.

It’s an interesting idea. Investors, especially retail ones, could do with more guidance on how to pick green investments. Savers have an appetite to invest ethically and responsibly, but find it hard. Many green or ESG funds have vague criteria that do not give the customer much comfort.

The LSE’s Green Mark at least has the virtue of some transparency. You can see what’s in the list. But it’s a rum bunch.

There are some proper environmental services companies in there — water companies Pennon and Severn Trent, recyclers Renewi and Biffa, for example. Buses are probably green, so Stagecoach has a decent claim. And there are some true green names like solar and wind power funds.

But packaging makers Smurfit Kappa and DS Smith, car parts group Johnson Matthey and oil palm plantation owner REA Holdings? Pig improver Genus?

GlobalCapital has no beef with any of these, which are no doubt trying to be as sustainable as they can. But do they deserve to belong to a mini-index of green companies?

Why doesn’t the LSE do investors a real favour. Instead of using some curious definition of the “green economy”, couldn’t it rank all its issuers by carbon footprint, sector by sector? Better still, list those that have signed up to a Science-Based Target for cutting their carbon emissions. They really deserve backing.

  • By Jon Hay
  • 10 Oct 2019

Global Green Bonds

Rank Lead Manager Amount $bn No of issues Share %
  • Last updated
  • Today
1 Bank of America Merrill Lynch 14.60 67 7.17%
2 Credit Agricole CIB 10.87 67 5.34%
3 HSBC 10.35 74 5.08%
4 BNP Paribas 10.27 65 5.04%
5 JPMorgan 9.54 66 4.69%