UK tops the FTSE4Good entries

Almost half the companies admitted to the FTSE4Good index in its latest review are from the UK, marking the fifth consecutive review in which it has come top of the global indices for responsible investment stocks.

The review, which was effective from the end of March, shows that 11 of the 23 new entrants to the series are UK companies from a range of sectors, including FTSE-250 companies Investec and Britvic, and FTSE-Smallcaps bars and clubs operator Luminar.

The UK has provided the most new entrants to the FTSE4Good index for five consecutive twice-yearly reviews, with Japan and the US coming second and third respectively. In the March review, Japan added five new entrants while the US added just three. Just one UK company, FTSE-250 listed Millennium & Copthorne Hotels, was deleted because it did not meet FTSE’s guidelines on countering bribery; in comparison, six Japanese companies and five US companies were dropped because they no longer meet FTSE4Good criteria on issues such as labour rights and climate change.

Stakeholder expectations
Will Oulton, director of responsible investment at FTSE, believes stakeholders now expect issues of corporate responsibility to be added to any company’s business practice.

“The responsible business community in the UK is leading the change and that is why there are consistently a large number of UK companies in the index. It is a brave company that doesn’t recognise responsible and sustainable business practice,” says Oulton.

The FTSE4Good index, launched in 2002, judges listed companies’ performance on a number of criteria, from money laundering and countering bribery measures to human rights. Climate change criteria was added in early 2007.

The fact that UK businesses are improving their sustainability and ethical performance has prompted prime minister Gordon Brown to insist that the country will pull itself out of recession by way of environmental management investments and that it can lead progress in this field amid European countries.

Brown has said the UK could become a global environmental capital and with the world’s first “carbon budget” unveiled in April this could be the way forward for UK business.

Useful links
Go to Index Criteria
Go to FTSE and click on FTSE4Good Index Series in the ‘Indices’ drop-down menu