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Image and environmental awareness don't always go hand in hand, at least not among the big boys of corporate Israel. "Environmentally aware investing" is quite the rage in kicky capital market circles, but the disparity between green image and the unclean reality, as one learns from the companies' financial statements, can make it hard to pick stocks that truly match one's ideals. (By the way, the trend of "investing green" isn't always about embracing Mother Earth. Some investors are simply being wary of companies that could potentially get sued for polluting.)

Sometimes companies simply fudge the issue of their environmental impact in their statements. From the company's financials alone, a reasonable investor might not realize that essences, aromatics and flavorings company Frutarom, which supplies the foodstuffs and cosmetics industry, was fined more than NIS 2 million this year for persistently polluting the environment. Nor would the reasonable investor easily understand from the financial statements of green-energy company Ormat Industries how its activities impact the environment. It simply doesn't say.

Ormat. Super-Sol. Golan Plastic. Delek Automotive. Israel Petrochemical Enterprises. Oil Refineries. These are among the 14 biggest companies listed on the Tel Aviv Stock Exchange that received a failing grade from the Israel Union of Environmental Defense (Adam Teva Vedin) for their environmental disclosure, out of the 25 companies that the organization examined.

This was the third year in which the union graded the largest-cap companies on the TASE by the quality of their environmental impact disclosure (it calls its index the "IUED-25".) The present list is based on the companies' financial statements for the year 2007. But TheMarker checked with the companies that earned the lowest marks and found no real change in their reports for 2008.

Make no mistake. All the companies meet the requirements of the law. But the law on environment-impact disclosure is so vague that companies can interpret it as they please.

At the other end of the grimy rainbow, we find companies that excel at disclosure. One such is the food company Strauss, which received a mark of 10 out of 100 last year but scored a near-perfect 98 this year.

Another star is Palram, which led the list. It makes thermoplastic sheets for the construction, agricultural and other sectors. Gadot Biochemical Industries and foodstuffs manufacturer Osem also received kudos for the quality of their environmental openness, as did potash producer Israel Chemicals and El Al Israel Airlines.

In other words, some of the companies most associated in the public mind with pollution are also the ones that are most open with information about their impact, while companies perceived as "green" are not necessarily so.

Generally speaking, the union felt that companies are changing their attitude toward environmental disclosure, as evinced in their 2008 statements. Ten of them consulted with the organization about their disclosures and allowed representatives to visit their plants.

The union asks companies to divulge their impact based on its own broad interpretation of the law, says director-general Tzipi Iser Itsik. "The law makes a general statement, and the degree of detail is set in standards that the Israel Securities Authority disseminated at the start of 2008."

But the problem is that the Securities Authority's standards have remained merely a recommendation. The process of enacting them into law, making them binding, is stuck fast. The economic crisis has changed its priorities, the authority told the union. The union hopes that it can urge the new government to expedite enactment of the recommendations as law.

"After examining corporate financial statements for three years, I feel that the improvement in the quality and scope of environmental disclosure is far from satisfactory," says Oren Azaria, chief economist at the union, who penned the actual report grading the companies.

The delay in publishing the Israel Securities Authority standards doesn't exactly inspire companies to adopt new, more responsible environmental criteria, he adds. The range in quality and scope of environmental disclosure shows that for the time being, it's a "luxury," says Azaria.

The financial meltdown shows that risk management in business the world wide had been inadequate, he sums up. If anything, improving regulation on environmental disclosure would make the capital market a stronger place.

As said, image is one thing, disclosure another. Ormat, to take that example, describes itself as "a leading vertically integrated company dedicated to providing solutions for geothermal power plants and recovered energy." It builds and runs power stations that produce electricity by harnessing the heat of the earth itself, in other words, and has recently been eyeing solar energy as well. Founded and controlled by Dita and Lucien (Yehuda) Bronicki, the reins have been passing to son Yoram.

According to the union, while there is no questioning Ormat's contribution to environmental protection the company is sparing in its disclosure of specific environmental impact. It doesn't elaborate in its financial statements about the environmental risks of its activities, and provides little information about environmental standards and legal issues.

The union urges the company's management to elaborate more.

Moving from geothermal energy to food, we find Super-Sol, the biggest supermarket chain in Israel. The company has devoted much energy in the last year to improving the "customer experience." Like Ormat, though, its financial statements are very light in detail on environmental impact.

Super-Sol is controlled by Nochi Dankner's IDB group and is managed by Efi Rosenhaus. It not only sells food and other items in its retail outlets, it also owns property.

The company's financial statements include meager details on the facilities and equipment it owns, and says nothing about environmental hazards. Super-Sol noted in its 2007 statement that 13 branches had no business license and that charges were pending against some. Each new branch is equipped with all required facilities to meet environmental requirements, the company states.

The company does have a chapter on the environment in its financial statement, but it's very general and doesn't elaborate on the environmental impact of its activities. Super-Sol doesn't say what it's doing to meet binding environmental standards, and it admits that its investment in the issue is not substantial.

Oil Refineries belongs to Israel Corporation, which is controlled by Idan Ofer. The company, which is based on a single large refinery in Haifa Bay, is run by Yashar Ben-Mordechai. Its main business is to produce oil distillation products and raw materials for the petrochemicals and plastics industries.

According to the union, the company's financial statements make no mention of the environmental hazards caused by its activities. It doesn't dwell on the pollution it causes.

Oil Refineries' financial statements do say that it is obligated to constantly monitor the output from its smokestacks. But it doesn't state that it actually does so. The statement does disclose two pending charges for emitting black clouds.

The financial statement also reveals that its strategic plan includes earmarking NIS 270 million for environmental, security and safety projects, and for improving operational reliability. But it doesn't say what part of that money is earmarked for what.

Dan Vehicle is another miscreant when it comes to paperwork. The company leases cars and manages vehicle fleets. Its financial statements don't even mention the environmental hazards involved in its activities, or its consumption of resources. Dan Vehicle does state that only 18 of its facilities have business licenses, down from 21 the year before. There is no other mention of any environmental issues.

Although the union has been biting in its criticism of Dan Vehicle's disclosure policy in the past, its 2007 report indicates that the company was unmoved, at least regarding improvement in that respect.

Golan Plastic is another company that keeps information on its environmental impact largely to itself in its financial statements, despite the proximity of its controlling shareholders Kibbutz Shaar Hagolan not only to the border with Lebanon but also to nature.

Then there's Israel Petrochemical Enterprises, owned by David Federman and run by Eran Schwartz. It makes and sells raw materials for the plastics industry and owns 50% of Carmel Olefins.

According to the union the company's financial statements do not list the environmental hazards arising from its activities, despite the toxicity of the raw materials (naphthalene, ethylene and propylene) that the company uses, not to mention the processes involved in their production. The company makes no mention of the by-products which are released into the environment. The state sued Petrochemical Enterprises in 2004 for polluting the air, and again in 2007 for exceeding its quota of waste spillage. In the case of this group, environmental disclosure seems very necessary indeed.

Petrochemical Enterprises does list the laws to which it is subject. But it doesn't mention whether it actually obeys them. It does list the charges against it in recent years, mostly involving pollution, noise, emissions and disease.

The union does have praise for the company's outlay on meeting standards of the Environmental Protection Ministry, but as the organization put it the number of legal proceedings against the company on environmental issues speaks for itself.