NEW YORK, New York - 2002 study of corporate environmental positioning in the global oil and gas sector by Innovest Strategic Value Advisors Inc., released today, indicates that leading firms posted superior results across a number of financial metrics including price-to-earnings ratio, price-to-cash flow, and operating per share, as well as in aggregate share price movement. The report examines the extent to which environmental, social and political factors influence the generation and protection of shareholder value within the oil and gas industry and provides strong evidence of the financial merits of sustainability leadership.

According to Sir Mark Moody-Stuart, former Chairman of Royal Dutch/Shell, "Evidence is growing that companies that pursue such a [sustainable] path can create wealth not only for society as a whole, but also for their employees and their shareholders. Indeed, leadership in sustainability can translate directly into leadership in innovation, in operating efficiency, in customer satisfaction and in brand value. By bringing the relationship between environmental performance and business competitiveness into sharper focus, this report makes a serious and valuable contribution to the current debate on the value of sustainability leadership within the global energy business."

In total, 17 integrated oil and gas firms were analyzed using Innovest's EcoValue'21® rating methodology, which benchmarks companies in various aspects of environmental risk, business opportunity and management strategy. Key themes of this year's report included global climate change, involvement in renewable energy technologies, resource usage, development of clean fuels, exposure to sensitive sites, and environmental management capacity and energy efficiency. In this study, companies receiving above average ratings - including Royal Dutch/Shell, BP and Suncor - outperformed companies with below average ratings by approximately 17.3% (1,730 basis points) over 5 years from June 1997 to June 2002. Over 3 years and 1 year, respectively, top firms outperformed laggards by 11.8% and 2.6%, respectively. Top performing stocks also posted superior results in other business performance and market valuation ratios, including:

§ Operating Profit Per Share; leaders outperformed laggards by 44% ($8.85 versus $6.13)
§ Price to Book Ratio (5 yr average); 33% (2.65 versus 2.00)
§ Price to Cash Flow (5 yr average); 49% (8.64 versus 5.81)
§ P/E Ratio (average highs over 5 yrs); 50% (21.8 versus 14.5)

According to Dr. Martin Whittaker, the study's primary author, the most successful companies in this sector over the long term will be those able to provide greater value added for customers - via a range of new and higher margin products and services - and to serve shareholders by reducing operating risks and optimizing efficiency. "We have moved one step closer to the smoking gun" says Whittaker. "In a business like the oil and gas industry, where margins are already razor thin, companies can generate genuine advantages by reducing costs, servicing customers more efficiently, and creating brand value and customer loyalty. These are areas where sustainability-related activities can demonstrably and directly influence earnings and returns".

Innovest Strategic Value Advisors is an internationally recognized independent investment research firm specializing in environmental finance and investment opportunities. Innovest's clients include the leading industrial companies and institutional investors throughout the world. Founded in 1995 by Dr. Matthew Kiernan, Innovest is headquartered in New York, with offices in London and Toronto. The company is chaired by Jim Martin, former Chief Investment Officer for North America's largest pension fund, TIAA-CREF. For further information please visit the company's website at www.innovestgroup.com.

Innovest Strategic Value Advisors, Inc.

Innovest Strategic Value Advisors, Inc.

Innovest Strategic Value Advisors is an internationally recognized investment research and advisory firm specializing in analyzing companies’ performance on environmental, social, and strategic governance issues, with a particular focus on their impact on competitiveness, profitability, and share price performance. Innovest currently has offices in New York City, Toronto, San Francisco, London, Paris, Sydney, and Tokyo.

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