Managers seek Body Shop talks

Friday 26 August 1994 18:02 EDT
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----------------------------------------------------------------------- TOP FIVE ETHICAL/GREEN FUNDS ----------------------------------------------------------------------- pounds Jupiter Intl Green-Ord (2001) 146.05 United Charities 118.32 Jupiter Intl Green Units 118.14 Credit Suisse Fellowship 116.58 NM Conscience 116.28 ----------------------------------------------------------------------- Performances show value of pounds 100 invested a year ago on an offer-to-offer basis with net income reinvested. Source: Micropal -----------------------------------------------------------------------

ETHICAL fund managers are urgently seeking clarification from Body Shop management over concerns about the contents of an unpublished report that casts doubt on the green image of the pounds 430m company, writes Caroline Merrell.

If the report were to be believed, it might lead to Body Shop being dropped from lists of approved investments, and funds would be forced to sell their shares.

NPI, the insurance company, which runs an ethical unit trust and an ethical pension, is pressing for a meeting with Body Shop.

Tessa Tennant, NPI ethical investments adviser, said: 'We have a research team of three, which looks at what is available and comes up with an approved list. The fund manager then chooses funds off that list.' Body Shop is on the list, although NPI funds do not at present hold Body Shop shares.

The removal of companies from approved lists is rare. For a short period, Jupiter Tyndall, one of Britain's biggest ethical fund managers, stopped investing in Tesco because of its use of greenfield sites for new superstores. Tesco was later reinstated. Jupiter Tyndall is also seeking clarification from the Body Shop about the allegations.

Peter Webster, head of Eiris, an independent research group that vets companies for about half the ethical and green fund managers in the UK, has seen a copy of the report on Body Shop that is due to be published in the US shortly.

'There are all sorts of allegations. From our point of view, the company has to have the opportunity to answer any allegations before we take any action,' he said.

Ethical funds tend to choose stocks on an exclusion basis - ignoring, for example, companies with interests in tobacco or arms. Green funds try to invest in companies that produce goods that help the environment. A company making a device that cuts down noxious emissions from factories would fall into this category.

Performance of the funds is mixed. On average, pounds 100 invested in one of them five years ago would now be worth pounds 148 excluding charges - better than returns from many unit trusts and investment trusts. Nearly all the funds are invested for growth, not income, and many have international exposure that means they do not qualify for personal equity plans.

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