Bradford supermarket chain Morrisons has defended its ethical trading policies after it came under fire from a major investment firm.

The company today insisted it took its social and environmental responsibilities seriously after it was accused of comparing unfavourably with rival stores.

Insight, the asset-management arm of high street bank HBOS, raised concerns about Morrisons following a report by the campaign group the Environmental Justice Foundation. Rachel Crossley, Insight's director of investment responsibility, said Morrisons' response to its questions had been disappointing.

She said it had "failed to keep up" with other retailers such as Sainsbury, Marks and Spencer, and Safeway. And she claimed the Bradford company had also failed to sign up to an ethical trading initiative. "We looked at all the supermarkets and found that Morrisons seems to be falling behind," she said, "Other companies seem to be a lot more active in terms of adopting a code on ethical sourcing."

Mrs Crossley said she was concerned about Morrisons "apathy" in light of its bid for Safeway, which she claimed had an impressive ethical trading policy.

"Safeway seems to have some very good procedures and we would hope that, if a takeover goes ahead, then Morrisons might adopt some of these procedures."

An investigation by the Environmental Justice Foundation is understood to have reached similar conclusions about Morrisons. It is currently drawing up a report which is expected to criticise the company.

But a spokesman for Morrisons rejected the claims. "As a company, we recognise our social and environmental responsibilities," he said.

He added that the company operated a business ethics working group and was also committed to cutting down waste, supporting local communities and saving energy.