FTSE4Good Index

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The FTSE4Good Index is a series of ethical investment stock market indices launched in 2001 by the FTSE Group.[1] A number of stock market indices are available, for example covering UK shares, US shares, European markets and Japan, with inclusion based on a range of corporate social responsibility criteria. Research for the indices is supported by the Ethical Investment Research Services (EIRIS).[2] The index excludes companies due to their involvement in tobacco production, nuclear weapons, conventional weapon systems, or coal power industry and rates companies for inclusion based environmental sustainability, relationships with stakeholders, attitudes to human rights, supply chain labour standards and the countering of bribery.[3][4]

It is uncertain whether inclusion in or exclusion from the index does effectively incentivise the affected companies to change their behaviour in regards to social responsibility[5]. As to the financial performance for investors, there is no evidence that a portfolio that is subject to ethical criteria performs significantly different compared to their unrestricted equivalent[3].

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References[edit]

  1. ^ ethicalinvestment.co.uk, FTSE4Good Archived 2012-01-22 at the Wayback Machine
  2. ^ FTSE.com, EIRIS Archived 2011-01-10 at the Wayback Machine
  3. ^ a b Collison, D. J., Cobb, G., Power, D. M. and Stevenson, L. A. (2008), "The financial performance of the FTSE4Good indices". Corporate Social Responsibility and Environmental Management, 15: 14–28. doi:10.1002/csr.144
  4. ^ "Index Inclusion Rules for the FTSE4Good Index Series" (PDF). FTSE Russell. September 2017. Archived from the original (PDF) on 15 December 2017. Retrieved 2 October 2017. Cite journal requires |journal= (help)
  5. ^ M. Martin Curran, Dominic Moran (2007), "Impact of the FTSE4Good Index on firm price: An event study", Journal of Environmental Management, Volume 82, Issue 4, March 2007, Pages 529-53

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