FTSE4Good Index
The FTSE4Good Index is a series of ethical investment stock market indices launched in 2001 by the FTSE Group. 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. 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.
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. 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.
