UK firms measure up for ethical index

By This Is Money
Updated: 11:07 EDT, 8 March 2007

Halfords and housebuilder Barratt Developments were today among 11 UK firms added to a FTSE index of socially responsible investments.

The FTSE4Good index was set up in 2001 to measure companies against socially responsible criteria, including environmental sustainability, stakeholder relations, upholding universal human rights, good labour and supply chain relations and an anti-bribery stance.

In the six-monthly review, 25 global companies were added to the index, with the highest number coming from the UK.

The other firms included were insurer Admiral, life and pensions group Standard Life, vaccine developer Acambis, insurance underwriter Catlin, telecoms technology group Emblaze, facilities management firm Erinaceous, foundry specialist Foseco, business equipment group Office2Office and electrical wiring firm T.Clarke.

At the same time, foods group Tate & Lyle and energy and environment consultancy firm AEA Technology were withdrawn from the FTSE4Good. They will lose their places when the changes take effect on March 16.

In total, 17 firms were removed from the index as they no longer meet the standards, with the majority of the evicted firms (12) based in the US. Four US companies made their way into the index.

FTSE4Good, which helps investors make socially responsible decisions, covers 23 markets with more than 2,300 potential constituents. Any UK company listed on the FTSE All-Share index can potentially be included in the index.

New requirements based on tackling climate change, including reducing carbon emissions, will be introduced from July 2009, although high impact sectors, such as airlines and electricity firms, will have to comply with the standards from next January.

The new standards mean that companies will have to show that they have a senior board member who has direct responsibility for overseeing climate change strategy and publishing a carbon reduction target.