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FTSE4Good Index Series

Contents

  1. Exploring the FTSE4Good Index Series
  2. Utilizing the FTSE4Good Index Series
  3. Examples of FTSE4Good Indexes

Understanding the FTSE4Good Index Series: A Comprehensive Guide

The FTSE4Good Index Series, administered by the Financial Times Stock Exchange-Russell Group (FTSE), comprises socially responsible equity indexes that spotlight companies excelling in corporate social responsibility (CSR). This article delves into the workings of these indexes, their significance, and how investors can leverage them for sustainable investing.

Exploring the FTSE4Good Index Series

Socially responsible investing (SRI) has gained momentum in recent years, fueled by organizations like the United Nations Principles for Responsible Investing (PRI). The FTSE4Good Index Series, established in 2001, encompasses various SRI indexes, each focusing on specific geographic regions. With transparent criteria centered on environmental, social, and corporate governance (ESG) factors, these indexes serve multiple purposes:

  • Financial Products: They facilitate the creation of sustainable investment-focused financial instruments.
  • Research: Investors utilize them to identify environmentally and socially sustainable companies.
  • Reference: Companies benchmark their ESG progress against these indexes.
  • Benchmarking: They serve as benchmarks for tracking the performance of sustainable investment portfolios.

Utilizing the FTSE4Good Index Series

Companies vying for inclusion in the FTSE4Good Index Series must adhere to stringent ESG standards. These standards cover diverse aspects such as human rights, labor relations, corruption prevention, and environmental sustainability. An independent committee, in collaboration with NGOs, academics, government bodies, and investors, formulates and updates these standards.

Some businesses are excluded based on their activities, including tobacco and weapons manufacturing. However, oil and gas companies undergo evaluation based on efforts to reduce fossil fuel production and transition to environmentally friendly practices.

Examples of FTSE4Good Indexes

The FTSE4Good product range encompasses various indexes tailored for specific regions and purposes:

  • FTSE4Good Emerging Indexes: Covering over 20 emerging countries.
  • FTSE4Good ASEAN 5 Index: Comprising companies listed on leading ASEAN financial markets.
  • FTSE4Good IBEX Index: Including companies from the BME's IBEX 35 Index and the FTSE Spain All Cap Index.
  • FTSE4Good Developed Minimum Variance Index: Aimed at reducing index volatility while maintaining full market allocation.
  • FTSE4Good Bursa Malaysia Index: Selecting constituents from the FTSE Bursa Malaysia EMAS Index.
  • FTSE4Good TIP Taiwan ESG Index: Measuring the performance of companies on the Taiwan Stock Exchange.