Ratings Categories

Our Climate rating looks for:

• A credible, detailed discussion of how a company has made emissions cuts in its main areas of impact in the past and how it will make them in the future.

For companies with annual turnover over £50 million:

• Full annual public reporting of its emissions – all three scopes.
• A future target for all scopes that is either approved by the SBTi or with cuts of 100% of scope one and two, and 67% of scope three, by 2050.
• If the company works in developing new extraction fossil fuel projects, building new fossil fired power stations or in doing anything with coal.
• Misleading public messaging on climate change, such as use of the term 'carbon neutral'. 
• Reputable and significant third-party criticisms.

Our Company Ethos rating looks for:

• Membership of lobby groups.
• Executive pay over £1million.
• Positive policy on pay ratios.
• Production in arms and military.
• Production in mining or fossil fuels.
• Production in nuclear power. 
• Core focus on environmentally or socially alternative products. 
• Significant commitment to progressive change. 
• Significant boycott in line with our ratings.
• Other significant third-party criticisms.
• Positive company structure including not-for-profit.
• Living Wage certification.
   

Our Tax rating looks for:

• Subsidiaries on our list of tax havens.
• The Fair Tax Mark accreditation.
• A  clear public tax statement confirming that it is company policy not to engage in tax avoidance activity and a narrative explanation for what each subsidiary located in a tax haven is for, and how it was not being used for purposes of tax minimisation.
• Public country by country reporting of sales made and tax paid in each jurisdiction that does not show likely avoidance activities.
• Reputable and significant third-party criticisms.

Our Workers rating looks at:

• Supplier code of conduct.
• Support for worker-driven monitoring in the supply chain.
• Company publishes suppliers (higher score the more tiers published).
• Choice of place of manufacture in relation to labour rights.
• Purchasing/buying policies and practices.
• Living wages commitment, action plan, methodology, achievements.
• Work with trade unions in the supply chain.
• Reputable and significant third-party criticisms.

For companies with annual turnover under £50 million:

• Supplier code of conduct.
• Company publishes suppliers (higher score the more tiers published).
• Proportion of Fairtrade products.
• Choice of place of manufacture in relation to labour rights.
• Purchasing/buying policies and practices - long term relationship with suppliers, visits to monitor workers rights, manufactures products in-house. 
• Reputable and significant third-party criticisms.

Climate change is no longer theoretical. It's with us now. We caused it, and it's up to us to do something about it. We all need to do our bit for the environment. Some sectors contribute particularly heavily to climate change. These include the airline and oil industries.

Companies making products that have a higher contribution to climate change than other products in the sector (such as cars with low mileage per gallon) will be criticised here, as will companies making misleading claims about climate change.

Climate Change sub-categories

• Banking, investment or other financial services relationship with a company criticised in this category
• Building, financing or lobbying for new roads
• Ethical Consumer Rating for Carbon Management and Reporting
• Company self-disclosure of an incident in this category
• Climate change secondary criticism
• Climate change secondary criticism - aggravated
• Misleading environmental claims - Climate Change
• Climate change - aggravated
• Climate change high impact sector - aviation
• Climate change high impact sector - cars/automobiles
• Climate change high impact sector - cement
• Climate change high impact sector - fossil fuels
• Other climate change criticism
• Positive policy addressing a climate change issue

Pollution isn't just about big oil spills or chemical disasters like the 1984 chemical disaster in Bhopal in India, which claimed the lives of over 10,000 people. There are tens of thousands of synthetic chemicals in regular use in a wide range of products from shampoo to computers. Many of these chemicals can pollute both the environment and our bodies.

Some chemicals are known as bio-accumulative, which means that they can stay stored in our body fat for years. Some chemicals - like PVC - have a heavy toll on the environment not just when they're being produced but during their lifetime and then later on when they're disposed of. Many of these chemicals have been singled out by campaigners like WWF and Greenpeace as particularly worrying.

Some companies are phasing out the use of such chemicals, but we need to keep the pressure up on those that are lagging behind. Pesticides and herbicides also come under this category. Our best buys will always, where possible, be free of harmful chemicals and so will be the healthier alternative for our bodies, our children and the environment.

Pollution & Toxics sub-categories

• Banking, investment or other financial services relationship with a company criticised in this category
• Health and safety
• Breach of discharge consent - land
• Breach of discharge consent - air
• Breach of discharge consent - water
• Manufacture or sale of products found to contain bio-accumulative and toxic chemicals
• Manufacturer of bio-accumulative and toxic chemicals (e.g. bromine, chlorine, PVC, endocrine disruptors)
• Building and/or operating non-clinical incinerators
• Company self-disclosure of an incident in this category
• Misleading environmental claims - Pollution & Toxics
• Other pollution and toxics criticism
• Ozone depleting chemicals use/purchase - aggravated
• Ozone depleting chemicals use/purchase
• Conviction air
• Conviction air and fine >UK£100,000
• Conviction air and fine >UK£5,000
• Conviction land
• Conviction land and fine >UK£100,000
• Conviction land and fine >UK£5,000
• Conviction water
• Conviction water and fine >UK£5,000
• Conviction water and fine >UK£100,000
• Pesticides and/or herbicides
• Pesticides and/or herbicides aggravated
• Pollution and toxics secondary criticism
• Pollution and toxics secondary criticism - aggravated
• Toxics release any
• Toxics release - aggravated
• Positive policy addressing a pollution and toxics issue
• Criticism related to unsustainable packaging
• Unspecified pollution conviction
• Enforcement notice imposed
• Waste disposal conviction 

This category looks to specific environmental destruction or exploitation of habitats and resources - whether it's palm oil plantations that threaten the orang utan with extinction, pollution incidents that kill off marine environments, or wood that hasn't come from sustainable sources.

It's more important than ever to conserve existing environments and prevent the further extinction of plants and animals. If you want to make sure your shopping doesn't threaten environments, look out for FSC certified wood and paper, buy recycled paper, and avoid products containing palm oil where you can.

Habitats & Resources sub-categories

• Banking, investment or other financial services relationship with a company criticised in this category
• Land use issues (e.g. greenbelt)
• Land use issues - aggravated
• Company self-disclosure of an incident in this category
• Criticism for impact on endangered species
• Misleading environmental claims - Habitats & Resources
• Dam design, construction or finance
• Other habitats and resources criticism
• Ethical Consumer timber sourcing policy (2011): Best rating
• Ethical Consumer timber sourcing policy (2011): Middle rating
• Ethical Consumer timber sourcing policy (2011): Worst rating
• Retails non-FSC wood products - aggravated (e.g. sale of illegally logged timber)
• Retails wood products not labelled as coming from FSC certified sources
• Habitat destruction
• Habitat destruction-  aggravated
• Unsustainable fishing
• Unsustainable fishing - aggravated
• Habitats and resources secondary criticism
• Habitats and resources secondary criticism - aggravated
• Unsustainable forestry
• Unsustainable forestry - aggravated
• Unsustainable resource extraction and mining
• Positive policy addressing a habitats and resources issue

Palm oil is an ingredient used in thousands of products from chocolate to shampoo. However, the mass production of palm oil is devastating the world's rainforests as well as being linked to human rights abuses.

We have been rating company performance on palm oil for over 15 years now. Until January 2017, companies picked up marks in three categories for this issue (Habitats, Climate Change and Human Rights).

From January 2017, we will be using our palm oil rating, which we developed with the Rainforest Foundation, to rank any companies operating in the following sectors: cosmetics, household cleaning products and food.

Companies able to demonstrate a fully certified supply chain for all palm ingredients used by the whole company group and that also declare suppliers and volumes will receive a best rating.

Companies that are palm oil free - using neither palm oil (CPO), palm kernel oil (PKO) nor palm derivatives - will also receive a best rating.

Palm Oil sub-categories

• Best Ethical Consumer rating for palm oil sourcing
• Middle Ethical Consumer rating for palm oil sourcing
• Worst Ethical Consumer rating for palm oil sourcing

In 1911, a fire in a garment factory in New York killed 500 workers. Workers were working in inhumane, unhealthy conditions and were poorly paid. You'd think, almost 100 years later, that things might have improved, but workers worldwide are still subject to sweatshop conditions.

In 2005, a fire in Bangladesh killed 250 people. The doors of the factory were locked, so they could not escape. In this category, we include all cases of workers' rights abuses - whether it's being forced to work over 60 hours a week, low wages, cases of harassment or a company ignoring health and safety legislation.

Workers' Rights sub-categories

• Provision of an inadequate or dangerous working environment
• Provision of an inadequate or dangerous working environment - aggravated
• Intimidation of workers by management (including dismissal for strike action)
• Banking, investment or other financial services relationship with a company criticised in this category
• Payment of wages below that necessary for an adequate living
• Company self-disclosure of an incident in this category
• Positive policy addressing a workers' rights issue
• Denial of right to associate, unionise or bargain collectively
• Discrimination by employers on grounds of race, sex, sexuality, age, creed, caste or disability
• Retails cotton products but no cotton sourcing policy, i.e. avoiding Uzbek cotton due to child labour
• Enforcement by a company of a working week over 48 hours
• Secondary criticism
• Secondary criticism - aggravated
• Enforcement of forced or excessive overtime
• Enforcements of excessive or unjustified penalties (fines etc.) on workers.
• Secondary evaluation of supply chain policy
• Exploitative use of child labour
• Serious criticism or fine from government health and safety body
• Harassment (including sexual harassment) or bullying of workforce.
• Use of forced or slave labour
• Use of prison labour

Many of the products that we buy are manufactured overseas in factories that may not even be owned by the company itself. Even so, we think that the companies ought to be responsible for the kinds of conditions those workers find themselves in, so we ask all companies manufacturing products to provide us with a 'supply chain policy'.

This is a document set out by a company detailing how the workers in their supply factories must be treated. Like environmental policies, these used to be documents with broad statements about 'abiding by country laws'. Nowadays, the supply chain policy can be a sophisticated document outlining lots of different conditions and may also include results of factory audits. Companies that are members of 'multi-stakeholder initiatives', such as the UK's ETI (Ethical Trading Initiative), have to abide by the initiatives' own code.

Companies making certified Fairtrade products will receive a top rating from us in this category.

Unfortunately, the existence of a good code doesn't mean that it is actually being adhered to, and so we can find huge contradictions: companies with the best policies sometimes receive the most criticisms for workers' rights abuses.

Most companies that we rate in our product guides will have had their supply chain management assessed. The criteria on which this assessment is based is listed below.

As you will see, the rating is broken down into the four areas - policy, engagement, reporting and difficult issues -, each with a certain set of criteria that a company must fulfil to get top marks.

Small companies (turnover less than £10.2 million) with an effective if not explicit practice addressing workers' rights in its supply chain are exempt.

So are companies whose products are all certified - or where necessary marketed - as fair trade.

• 1. SUPPLY CHAIN POLICY (SCP)

1.1    Coverage of six key issues

A code for labour standards in the supply chain exists that covers all International Labour Organisation (ILO) core conventions, without qualification, and the code includes a clear living wage provision and an hours of work provision that is consistent with ILO conventions [48hrs per week +12 hour overtime]:
1) no use of forced labour
2) freedom of association
3) payment of a living wage
4) working week limited to 48 hours and 12 hours overtime
5) eliminations of child labour (under 15 years old, or under 14 if country has ILO exemption)
6) no discrimination by race, sex etc.

1.2    Plus a  statement that it applies to the whole supply chain

The code is clearly stated to apply to the entire breadth of the supply chain, plus some depth (e.g. some second-tier suppliers).

Scoring

Company has good SCP (Requires: children, forced labour, discrimination, freedom of association, living wage, max 48hrs, whole SCP statement)
Company has reasonable SCP (Requires: five or more of the above)
Company has rudimentary SCP (Requires: children, forced labour, discrimination, freedom of association)
Company has poor SCP, no evidence or SCP or did not reply

• 2.    STAKEHOLDER ENGAGEMENT (SE)

2.1    Membership of multi-stakeholder processes (MSI)

The company is a member of the Ethical Trading Initiative (UK or Norway), the Fair Labor Association, the Fair Wear Foundation, or Social Accountability International.

2.2    Trade Union/NGO/NFP Engagement

There is third party involvement that includes systematic input from NGOs and/or labour and/or not-for-profit in the country of supply into the verification of labour standard audits.

2.3    Complaints process

There is evidence that workers can, on a regular basis, provide anonymous feedback on working conditions to the retailer or brand at no cost and in their first language, ideally independently investigated and governed by a formal agreement with a global union.

Scoring

Company has good SE (requires: multi-stakeholder initiative (e.g. ETI), NGO involvement and employee complaints mechanism)
Company has rudimentary SE (requires: one of two of the above)
Company has poor SE, no evidence of SE or did not reply

• 3.    AUDITING AND REPORTING(A&R)

3.1    Disclosure

There is full and complete reporting of the results of audits, including quantitative analysis of audit findings at the factory or supplier level.

3.2    Schedule

An auditing work plan has been scheduled, the process is transparent (e.g. 75% of factories in Vietnam by June 2010) and is based on risk assessment, and is currently being implemented and reported upon, and the company has ideally publicly disclosed the names and addresses of the facilities producing its products. 

3.3    Whole supply chain

There is a policy committing the company to auditing labour standards across the entire breadth of the supply chain, plus some depth (e.g. some second-tier suppliers/some suppliers of internal products).  OR the auditing program applies to the vast majority of the breadth of the supply chain, plus significant depth.

3.4    Remediation

There is a policy for handling instances of non-compliance with the code, and this policy includes a staged approach to dealing with violations.

3.5    Costs

All or part of the costs of an audit are paid by the buying company.

Scoring

Company has good A&R policy (requires: disclosure of audit results, schedule or audit plan, commitment to audit the whole supply chain, remediation strategy and costs)
Company has reasonable A&R (requires: three or more)
Company has rudimentary A&R details (requires: two or more)
Company has poor A&R details, no evidence of A&R or did not reply

• 4.    DIFFICULT ISSUES (DI)

4.1 Purchasing

There is ongoing, scheduled training for buying agents on labour standards in the supply chain and/or financial rewards for suppliers meeting labour standards, and/or a preference for long-term supplier arrangements has been demonstrated.

4.2 Audit Fraud

There is acknowledgement that problems of audit fraud exist and a systematic approach to addressing audit fraud, e.g. use of unannounced audits/quality auditors with high-risk suppliers.

4.3 Other

One or more of the following:

Illegal FOA
There is explicit acknowledgement of the problems of freedom of association in countries where independent trade unions are restricted/illegal (e.g. China, Bangladesh and Belarus) and a systematic approach to addressing this problem.

Outworkers (where relevant)
There is explicit acknowledgement of the problems stemming from the use of homeworkers/outworkers/subcontractors and a systematic approach to addressing this problem.  Living wage project might help.

Other
Other measures that are considered significant

4.4 Living wage

Company is taking measures to address living wages (other than inclusion of living wage clause in code of conduct).

Scoring

Company has good DI policy (requires: addresses all DIs - audit fraud, purchasing practices, living wage and homeworkers where relevant, trade unions in china etc.)
Company has reasonable DI policy (requires: two or more)
Company has rudimentary DI policy (requires: one)
Company has a poor approach to DIs, addresses no DIs or did not reply

This column highlights companies that have marketed their products in a way that has been criticised for causing physical harm or is detrimental to health. The most famous company that has consistently been criticised in this area is Nestle, which has been criticised for the way that it markets its baby milk products.

Other examples of irresponsible marketing include drug companies that have been criticised for putting products on the market even after negative results.

Irresponsible Marketing sub-categories

• Banking, investment or other financial services relationship with a company criticised in this category
• Criticism for irresponsible marketing of food products
• Criticism for irresponsible marketing of food products - aggravated
• Company criticised for marketing alcoholic drinks in a way appealing to children (under 18)
• Company criticised for marketing unhealthy food/drink products in a way designed to appeal to children
• Infringement of the International Code of Marketing of Breastmilk Substitutes
• Company has been criticised for marketing tobacco in a way that appeals to young people
• Irresponsible marketing of alcohol
• Company has been criticised for marketing tobacco products
• Company invests in the tobacco industry
• Company manufactures tobacco products
• Company sells tobacco products
• Company supplies the tobacco industry
• Irresponsible marketing of non-food products
• Irresponsible marketing of non-food products - aggravated
• Irresponsible marketing of pharmaceuticals
• Irresponsible marketing of pharmaceuticals - aggravated
• Company self-disclosure of an incident in this category
• Positive policy addressing an irresponsible marketing issue
• Use of excessively thin or childlike models in fashion advertising

This category not only includes companies that supply weaponry to the armed forces but also those supplying any goods or services to the armed forces (though the severity of the rating is different).

The sale of handguns is also included in this column, which is why you might find a famous US-owned supermarket receiving a bad rating here.

Arms & Military Supply sub-categories

• Banking, investment or other financial services relationship with a company criticised in this category
• Non-strategic manufacture or supply for the military
• Development, manufacture or supply of chemical or biological weapons
• Provision of promotional, marketing or sales services to the military or arms manufacturers
• Development, manufacture or supply of combat aircraft, including spy planes and 'drones'
• Supply of communications services and equipment for the military
• Development, manufacture or supply of launch, guidance, delivery or deployment systems for missiles
• Supply of computers/electronic equipment to the military
• Development, manufacture or supply of tanks or armoured vehicles or vehicles adapted for weapons launch
• Supply of financial and banking services to the military
• Development, manufacture or supply of warships and other boats involved in military intelligence
• Supply of fuel to the military
• Development, manufacture or supply of weapons systems components. including guns
• Supply of weaponry or torture or restraining equipment illegal under international law
• Development, manufacture, supply or maintenance of nuclear weapons, nuclear weapons systems and parts
• Unspecified or specified strategic services to the military
• Illegal sale of arms

Much of modern farming is industrialised and intensive and can often be termed 'factory farming' because of the philosophy of mass production. With this type of farming, many animals are crammed together in the smallest possible space, and their health and wellbeing suffers as a result.

Animal rights campaigners argue that if we farm animals then we should be treating with them with compassion and respect and that these values are incompatible with factory farming methods. Companies that sell factory farmed meat or products with battery eggs will be criticised in this category.

Soil Association certified organic farming in general is much better for animals, and so companies with organic certified meat and dairy products are not criticised in this area.

Factory Farming sub-categories

• Banking, investment or other financial services relationship with a company criticised in this category
• Company manufactures or supplies intensive farming equipment
• Company factory farms fish
• Company factory farms fur
• Company factory farms meat
• Company factory farms poultry (broilers or eggs)
• Company supplies breeding stock
• Company sells fur that is not labelled as free range
• Company sells or processes meat or poultry (broilers/eggs) not labelled as organic or free range
• Positive policy addressing a factory farming issue
• Company involved in genetic modification for factory farming

Companies that have been accused or prosecuted for cruelty to animals are criticised here. Also found here are activities that might lead to animal suffering, such as zoos and circuses, using animals to advertise products or livestock farming.

It also includes the use of slaughterhouse by-products - such as leather or gelatine.

Animal Rights sub-categories

• Banking, investment or other financial services relationship with a company criticised in this category
• Company is supporting animal abuse through advertising
• Company for which dairy products are a core part of business
• Company or employee has been accused of cruelty to animals
• Company involved in the production, supply or retail of fur products
• Company or employee has received a conviction for cruelty to animals
• Company is a dairy farmer
• company self-disclosure of an incident in this category
• Company is a farmer of non-intensive or free range meat
• Company sells or processes factory farmed meat, poultry or fish
• Company sells or processes free range meat, poultry or fish
• Company is a free range egg producer
• Company is a slaughterhouse owner
• Company sells products containing slaughterhouse byproducts (including leather)
• Company is criticised for involvement in transport of animals e.g. live exports
• Company supplies animal feedstuffs
• Company is involved in circuses
• Company uses musk, civet or ambergris
• Company is involved in support for bloodsports
• Company uses/produces silk
• Company is involved in the sale of exotic pets
• Company is involved in the whaling industry
• Company is involved in zoos
• Positive policy addressing an other animal rights issue

Companies may have boycotts called against them for lots of different reasons. At Ethical Consumer, we report on all the boycotts we receive that have a registered headquarters, although we don't necessarily endorse them.

Some campaign groups think that boycotts aren't a good idea in case a company withdraws its business from a factory overseas as a result causing lots of workers to lose their jobs and livelihood. Others believe they can be very effective. We think it's up to you where you spend your money.

Boycott Call sub-categories

• Banking, investment or other financial services relationship with a company criticised in this category
• Ongoing boycott of one subsidiary or brand
• Ongoing boycott of the whole company group
• Boycott call - now ceased

We think that companies have too much influence over governments through lobby groups or donating to the parties themselves.

There are negative marks for companies that donate money to political parties, or companies involved in persuading governments and institutions, through international lobbying organisations, to change policy.

Political Activities sub-categories

• Banking, investment or other financial services relationship with a company criticised in this category
• Lobbying governments for contracts or policy changes
• Bilderberg Group
• Business Action for Sustainable Development
• American Chamber of Commerce - AMCHAM-EU
• Business Round Table
• Transatlantic Business Dialogue
• Trilateral Commission
• European Round Table of Industrialists
• European Services Forum
• International Chamber of Commerce
• US Coalition of Service Industries
• World Business Council for Sustainable Development
• World Economic Forum
• Member of free trade lobby group, other than those listed
• Positive policy addressing a political activities issue
• Recorded meetings with ministers 
• Secondary criticism
• Company has stated policy of not making political donations
• Suppression of criticism for activities in Ethical Consumer categories by legal or political means
• Donations to both left and right wing parties >£49,999 
• Donations to both left and right wing political parties <£49,998
• UK Conservative party <£50,000
• UK Conservative party £50,000 or more 
• UK Labour party <£50,000
• UK Labour party £50,000 or more
• US Republicans >$100,000
• Less than £50,000 (or unknown amount) to any other political party
• £50,000 or more to any other political party 
• Initiating NAFTA
• Lobbying against legislation designed to correct abuses in other Ethical Consumer categories 
• Lobbying against sound environmental policies 
• Lobbying against sound environmental policies - aggravated
• WTO lobbying

Companies are often found to be engaging in financial practices that cause harm to society. This can include anything from price fixing to tax avoidance.

We rate companies based on the criteria below.

Anti-Social Finance sub-categories

• Banking, investment or other financial services relationship with a company criticised for anti social finance
• Company criticised for enforcing poor terms on small suppliers
• Criticism for irresponsible marketing of financial products
• Criticism for irresponsible marketing of gambling products
• Excessive remuneration for directors or other staff
• Exploitative currency speculation
• Insider trading or dishonest share dealing
• Internet retailer routing sales offshore
• Licensing relationship with a company criticised in this category
• Mis-selling of products (non health related)
• Other publication is critical of transparency record
• Payment of bribes or other corrupt practices
• Positive policy addressing an anti-social finance issue
• Price fixing
• Providing tax haven services or facilities for other companies
• Secondary criticism
• Self-disclosure of an incident in this category
• Third World debt involvement

We rewards those companies that demonstrate an ethos committed to sustainability across their whole business.

Back in the 1990s, ethical products tended to be made by ethical companies. These days it's not so easy to tell what an 'ethical' company is just by the products that it makes.

Included in this category are co-operatives or not-for-profit trading structures, fully vegan companies, and those that only sell organic or fair trade products.

Company Ethos sub-categories

• All products are fair trade
• All products comply with BUAV not tested on animals criteria
• All products are innovative environmental alternatives
• Company is a mutual organisation
• All products are organic
• Company is explicitly vegetarian in a sector where this is not the norm
• All products are vegan
• Not-for-profit trading structure
• Company is a B corp

We rate companies on whether they own companies that are likely to be used for tax avoidance purposes. 

Those that receive our best rating do not have more than one subsidiary registered in tax havens. Those with a middle have two or more normal risk (i.e. trading) subsidiaries in tax havens. And those that received a worst have two or more high-risk subsidiaries registered in tax havens.

The company also gets a middle or worst if it has no public country-by-country reporting or policy statement and narrative explanation.

Tax Conduct sub categories

• Worst or middle ECRA ranking for likely use of tax avoidance strategies