FTSE International, the leading provider of British share indices joint owned by the London Stock Exchange and the Financial Times, today launched a new range of indices for socially responsible investment.
FTSE International described the new indices as 'a series of benchmark and tradable indices facilitating investment in companies with good records of corporate social responsibility.'
But the inclusion of companies such as oil majors Shell and BP, while leaving out supermarket Tesco and Royal Bank of Scotland, will raise eyebrows among environmental protestors. BP in particular has drawn flak for its slow take-up of renewable energy projects and its involvement in a pipeline project in Tibet.
FTSE chief executive Mark Makepeace defended the inclusion of such companies in the new indices. 'I look at what these companies are doing, they are the leaders, they are setting targets and producing reports on the environment,' he said. 'We are not trying to say which are good and bad companies.'
Makepeace said it was not the FTSE's place to make moral judgements about which companies to include, rather they would be judged against transparent ethical criteria.
Certain groups of companies, such as tobacco companies, weapons producers and nuclear power companies, were globally excluded from so-called ethical funds and the FTSE indices reflected this, he said. But these sectors were not permanently excluded from entry, he added. 'It is not our intention to exclude anybody from entry. We have to put in place performance criteria so that if the companies match up to them they can be included,' he said.
Makepeace said FTSE International had consulted with a number of international bodies and looked at global standards such as the United Nations Declaration on Human Rights in making its selection.
The eight indices, which aims to raise $1 million for the children's charity UNICEF in its first year from license fees and other revenue, will go live on July 31.
