FTSE4Good Seeks a Middle Way with Its Exclusion Policy

Financial News, July 16, 2001 | Go to article overview

FTSE4Good Seeks a Middle Way with Its Exclusion Policy


Mark Makepeace of FTSE International is delighted that aspects of his ethical FTSE4Good index have been criticised by the CBI and Friends of the Earth.

He says: "Ours is not a green index. It is our attempt to include companies that support mainstream beliefs on what should constitute best practice in corporate social responsibility.

"As time goes on, and attitudes evolve, we may well raise the bar, particularly as far as high impact companies are concerned."

Areas such as the sectors to which banks lend may come under scrutiny at some point, together with close monitoring of performance data on the environmental front.

Makepeace agrees it may be relevant to assess the ways in which companies are allocating research and development spending.

He has personally driven FTSE's decision to start an ethical index: "I've supported Unicef projects for some time. I like the charity because its work is global, it encourages a self-help attitude and it helps children," he says.

Makepeace believes companies should be prepared to invest in communities which need help. FTSE itself hopes to give a $1m (E1.18m) portion of its FTSE4Good fees to the charity.

Makepeace concedes that the whole issue of which companies should be included in the new index was "a lot harder" than he expected.

From the outset the FTSE ethical committee, chaired by Mervyn Pedelty, Co-operative Bank chief executive, listened hard to the debate between the two sides of the Social Responsibility Investment camp.

One side refuses to invest in companies considered venal. The other is prepared to do so if such companies make enough effort to improve their practices.

The likes of Innovest (see below) believe that if companies get screened out, they have no incentive to improve themselves.

Advised by Eiris, FTSE ended up seeking a middle way. It decided to exclude tobacco producers, companies involved in the nuclear industry (including those mining uranium) and weapons manufacturers.

"We took the view that we would be a laughing stock if we didn't leave out these categories," says Makepeace.

"Over time, however, I'd like to think we might be able to include companies from all, or nearly all, sectors. Tobacco will always be hard, but, one day, nuclear energy might be seen as less evil than energy processes which throw off carbon dioxide. And you can't ignore the case for defence capabilities."

FTSE is proposing to include in its index companies such as BP, Shell and ICI, which are seen as high impact polluters. For good measure, BP has also been accused of undermining human rights by operating in Tibet.

Makepeace says FTSE currently checks out three socially responsible categories. First, it looks at environmental sustainability (covering policy, management systems and reporting); human rights (checking whether policy conforms with United Nations resolutions), and stakeholder relations (policy, management systems, performance and monitoring).

It feels that BP, Shell and ICI comply with these criteria. In contrast, Royal Bank of Scotland does not have a human rights policy for its operation in Indonesia, so it has been excluded. BG has been left out because it does not have a human rights policy for Egypt. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

FTSE4Good Seeks a Middle Way with Its Exclusion Policy
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.