The FTSE4Good Index Series is a series of
ethical investment stock market indices launched in 2001 by the
FTSE Group
FTSE International Limited trading as FTSE Russell ( "Footsie") is a British provider of stock market indices and associated data services, wholly owned by the London Stock Exchange (LSE) and operating from premises in Canary Wharf. It operat ...
which reports on the performance of companies which demonstrate "strong
Environmental, Social and Governance practices". 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). 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.
[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. .]
The index series is published by
FTSE Russell
FTSE Russell is a subsidiary of London Stock Exchange Group (LSEG) that produces, maintains, licenses, and markets stock market indices. The division is notable for FTSE 100 Index, Russell 2000 Index, among other indices.
The brand and divisio ...
.
According to an
event study reported in 2007, it was uncertain whether inclusion in or exclusion from the index effectively incentivised the affected companies to change their behaviour in regards to social responsibility. Curran and Moran, who undertook the study, found that the movements in
share price
A share price is the price of a single share of a number of saleable equity shares of a company.
In layman's terms, the stock price is the highest amount someone is willing to pay for the stock, or the lowest amount that it can be bought for.
B ...
s which followed FTSE4Good announcements were not
significant in a statistical sense.
[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, pp. 529-53. . As to the financial performance for investors, there is no evidence that a portfolio that is subject to ethical criteria performs significantly differently compared to their unrestricted equivalent.
See also
*
Calvert Social Index
The Calvert Social Index is a stock market index created by Calvert Investments as a benchmark of large companies that are considered socially responsible or ethical. It currently consists of 680 companies, weighted by market capitalization, select ...
*
MSCI KLD 400 Social Index The MSCI KLD 400 Social Index was launched in 1990 and is designed to help socially conscious investors weigh social and environmental factors in their investment choices.
It was founded by KLD's Amy Domini as the Domini 400 Social Index.
The MS ...
References
External links
FTSE4Good Index Series
FTSE Group stock market indices
Ethical investment stock market indices
{{Finance-stub