Two companies were booted off the JSE's Socially Responsible Investment (SRI) index yesterday, one quit in protest and another 11 became members as South African companies increasingly focused on sustainability issues.
Shipping business Grindrod and aluminium company Hulamin were given the chop from the 2009 index, which measures the environmental, social and governance performance of listed companies.
Brait quit the index in protest at a recent Ernst & Young report that externally measured the performance of SRI constituents and rated the financial services group in the bottom category.
Anthony Ball, Brait's chief executive, said the JSE should have used its influence to exercise some vigilance over how the information was used.
"I'm not angry at the JSE. I'm just saying that if you have an index and it creates a forum for cheap shots, then I must get off the forum," he said.
Corli le Roux, the JSE's head of the SRI index, would not disclose any information about companies that were excluded, citing the JSE's preference for engaging companies so as not to disclose confidential information or deter companies from participating.
Grindrod company secretary Craig Robertson said the group was excluded because it had set qualitative rather than quantitative targets for reducing emissions of noxious gases from its fleet of about 70 ships and up to 400 car carriers and bulk transport vehicles.
The targets did not relate to carbon emissions, as the SRI index has not yet incorporated climate change criteria into its analysis. The JSE plans to introduce climate change into the matrix for high-impact companies from next year.
Robertson said Grindrod planned to appeal its exclusion "because we have made more strides this year than any other", particularly in terms of measurement, environmental policies and setting targets for water use, electricity and waste. If the appeal was not successful, Grindrod intended to work towards membership of the index next year.
Hulamin executive committee member Richard Jacob said the company was "a little bit surprised" at its exclusion.
"We take corporate social investment and sustainability extremely seriously," said Jacob, adding Hulamin believed it was a leader in some areas that come under the SRI spotlight, such as employment equity.
New entrants to the index were AECI, DRDGold, Growthpoint Properties, New Clicks, Palabora Mining, Rainbow Chicken, RMB, Sasol, Steinhoff International and Vodacom.
Sasol's return came after it lost its spot in 2008 amid corporate governance problems relating to anti-competitive behaviour. Le Roux would not comment specifically on Sasol, but said: "We were satisfied the areas we asked them to address are being sufficiently addressed. We are comfortable with their performances."
Of 109 companies reviewed, 67 were found fit to be constituents, representing the highest number in the history of the five-year-old SRI index.
Mining firms were the biggest sector represented - all 14 mining firms surveyed qualified for membership - reflecting their dominance on the JSE and the longer period they have been in the spotlight.