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FTSE Group (FTSE), the global index provider, takes another step forward in the area of corporate social responsibility benchmarking, as it launches a new set of criteria to offset climate change for its FTSE4Good Index Series. FTSE4Good is used by investors as a way to identify companies with positive records of CSR practice; and by listed companies as a framework for best practice. The introduction of FTSE4Good climate change criteria keeps the index series aligned with one of the major concerns facing business and investors today. The implementation of these criteria is a milestone in the ongoing evolution of the leading SRI index series, and is supported by industry experts, government and NGOs alike.
Mark Makepeace, Chief Executive of FTSE Group said, “Working with our Committee of SRI and CSR experts, FTSE is committed to keeping the criteria governing the FTSE4Good Index Series in line with CSR best practice. Climate change is an important issue for companies and investors alike, and investors understand these criteria will make an important contribution to helping companies manage their risks.”
The criteria will be implemented into the index series on a phased basis over two years, with the first deadline in January 2008. Just over 250 companies have been identified as having the highest impact on climate change, and of these, under 50 are expected to already meet the climate change strategy, system, disclosure and performance requirements. FTSE’s in-house Responsible Investment Unit will work directly with affected companies to help them understand the criteria, as well as what they have to do to comply, and the timeframes.
Mark Kenber, Policy Director at The Climate Group said: “We welcome the new FTSE4Good criteria and FTSE’s role in helping to put the growing demand of addressing global climate change concerns on the business agenda. We believe incorporating sustainable behaviour into business practice will deliver long term benefits to stakeholders. Clearly a lot of companies will have to work hard to meet these new criteria but we are convinced that their efforts will bring positive impacts, both economic and environmental.”
FTSE Group undertook a broad public climate change consultation during 2006, with over 100 responses from corporations, fund managers, non-government organisations and private investors. As part of FTSE’s ongoing strategy to raise the standards for entry into the index series, the criteria have been developed in conjunction with The Climate Group; The Institutional Investors Group on Climate Change; The Carbon Trust; Forum for the Future and the World Wildlife Fund. These responses formed the basis of the new criteria.
Oliver Greenfield, Director of One Planet Business, WWF said: "The Stern Review described climate change as the greatest market failure the world has ever seen. If investors are to play a constructive role in helping society correct that failure, they will need good information to inform their decisions. The FTSE climate change criteria are an important step along this path."
The FTSE4Good Index Series is designed in line with international indexing standards expected by the global investment community. FTSE4Good brings transparency to SRI indexing, making it easy to understand criteria and qualification process. For more information about the FTSE4Good index series, including full details of the new climate criteria and its implementation timetable, please visit www.ftse.com/ftse4good.
Sir Digby Jones, Honorary Fellow, UNICEF UK and former Director General of the CBI said: “I welcome and applaud the launch of the FTSE4Good climate change criteria. I am also delighted to celebrate the 5th anniversary of the FTSE4Good and UNICEF partnership, which, over the past 5 years, has had such a tremendous impact on the lives of children all over the world.”
All FTSE4Good fund licensing revenues go to UNICEF to help children around the world. Since the launch of the index, 2.5 million USD went to supporting a number of UNICEF’s campaign to help children.
