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July 16, 2001
FTSE4Good Index Series Announces Constituents
by Mark Thomsen
Microsoft, AOL Time Warner and Intel are the top three in both the US 100 and Global 100 indexes.
SocialFunds.com --
Last week UK-based stock market index firm FTSE named the constituents of six of its eight
FTSE4Good indexes. Companies composing the four tradable indexes, FTSE4Good UK 50 Index, FTSE4Good
Europe 50 Index, FTSE4Good US 100 Index and FTSE4Good Global 100 Index, were announced along with
companies selected for two of the benchmark indexes, FTSE4Good UK Index and FTSE4Good Europe Index.
The indexes will go live on July 31.
 FTSE Chief Executive Mark Makepeace believes
the indexes mark the mainstreaming of socially responsible investment. "Increasingly, individuals
and their pension funds seek to invest in socially responsible companies," said Makepeace.
"FTSE4Good meets that demand and provides an independent measure for the SRI community."
All licensing fees from the FTSE4Good tradable indexes will be donated to the United Nations
Childrens Fund (UNICEF). FTSE expects $1 million for UNICEF in the first 12 months after launching
the indexes.
In evaluating companies for inclusion, FTS4Good considered performance
assessments on three areas: working toward environmental sustainability, developing positive
relationships with stakeholders, and upholding and supporting universal human rights.
Three industries are excluded from the FTSE4Good indexes: tobacco, weapons, and nuclear power.
FTSE4Good indexes have fewer screens than the Domini 400 Social Index, but more than the Dow Jones
Sustainability Index, which only employs a weapons screen.
The ability to analyze a given
company's social and environmental performance heavily depends on disclosure of such information by
the company itself. Inclusion in the FTSE4Good indexes is therefore as much a reflection of a
company's disclosure policies and transparency as its actual social and environmental performance.
FTSE worked in association with EIRIS (Ethical Investment Research Service) in creating
the indexes. EIRIS is an independent provider of research on corporate social, environmental and
ethical performance. FTSE is jointly owned by the Financial Times and the London Stock Exchange.
The top five companies in the FTSE4Good US 100 are Microsoft (ticker: MSFT), AOL Time
Warner (AOL), Intel (INTC), Johnson & Johnson (JNJ), and Merck & Co. (MRK).
Microsoft, AOL Time Warner and Intel are the same top three in the FTSE4Good Global 100.
Numbers four and five are BP (BP)
and GlaxoSmithKline (GSK), both based in the UK. At 51 companies, U.S. firms represented more than
half of the Global 100 index. Next was the U.K. at 13 companies, followed by Germany, the
Netherlands and France, at 7, 6 and 6, respectively.
The top five companies in the
FTSE4Good UK 50 are BP, GlaxoSmithKline, Vodafone (VOD), HSBC (HBC), and
AstraZeneca (AZN). The top five in the FTSE4Good Europe 50 are nearly the same as the UK 50,
except number four is Royal Dutch
Petroleum (RD) and number five is HSBC.
Companies that have not qualified for their
respective appropriate index or indexes can appeal to the FTSE4Good Advisory Committee before
August 10. They will be considered for inclusion following the first bi-annual review of the
companies listed in September.
One of the indexes has already been licensed for a mutual
fund. Close Fund Management, a subsidiary of Close Brothers Group plc, launched a fund last week
that will track the FTSE4Good UK Index. Close Fund Management has promised to donate up to 40
percent of its net revenue from the fund to UNICEF.
©
SRI World Group, Inc. All Rights Reserved.
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