March 21, 2002
FTSE4Good Indexes Add Companies After Semi-Annual Review
by Willliam Baue
FTSE4Good has significantly expanded its universe of socially responsible companies.
Last week, the London-based stock market index firm FTSE Group announced the results of the
semi-annual review of its FTSE4Good series of socially responsible
investment (SRI) indexes. An additional 82 companies have met the FTSE's corporate social
responsibility criteria and will be added to several of the FTSE4Good indexes. Many of the
companies newly joining the FTSE4Good universe are large American firms. FTSE also released
performance statistics of the indexes since the last review.
The FTSE Group operates independently
of its joint owners, the London Stock Exchange and Financial Times. Over a period of several
months in 2001, FTSE introduced a benchmark index and a tradable index for each of four markets:
UK, Europe, US and Global. On March 11 of this year, the FTSE4Good Advisory Committee, an
independent board of international experts in SRI, conducted the second semi-annual review of the
FTSE4Good indexes. Due to the staggered introduction of the indexes, this review represented the
first comprehensive assessment of all eight indexes.
"The FTSE4Good series proves that
it's possible to create an investible financial tool, which also sets attainable CSR [corporate
social responsibility] standards for companies worldwide," said FTSE Group Chief Executive Mark
The global indexes experienced the most profound changes, numerically. The
FTSE4Good Global underwent a 7.5 percent turnover, with 62 companies being added and four being
deleted. Five companies were added to the FTSE4Good Global 100 Index, and five were subtracted.
This represented a 16.8 percent turnover rate, however, due to the smaller size of the index.
US-based Pfizer (ticker: PFE),
which now meets FTSE4Good SRI criteria, entered both global indexes, and now represents the third
largest company in the FTSE4Good universe. The changes the committee implemented took effect at
the beginning of this week.
The review considers market data through the last day of
trading in the previous month--in this instance, February 28. Over the past three-month period,
the Global Index decreased 4.11 percent, and the Global 100 dropped 4.14 percent. The Global Index
was introduced in November, and hence did not return half-year results. The Global 100 lost 4.81
percent over the past half-year.
Percentage-wise, the US indexes experienced the most
significant transformations. The FTSE4Good US Index, to which 11 companies were added and two were
dropped, turned over by 12.6 percent. The FTSE4Good US 100 Index turned over 28.6 percent, with 13
companies being added and 13 dropped. Citigroup (C) and Weyerhaeuser (WY) joined both the
tradable and the benchmark indexes, with the former ranking second in terms of size. The advisory
committee excluded Providian Financial Corp. from the universes of both indexes.
Index fell 4.57 percent over the previous three months. Its November introduction precluded it
from consideration for half-year results. The US 100 Index declined 3.79 percent over the previous
three months, and 3.10 percent over the previous half-year.
The UK indexes did not change
nearly as dramatically as the Global and US indexes. Twenty-four companies were added to the
FTSE4Good UK Index and 22 were subtracted, a 1.2 percent turnover. Only one company was added to
the FTSE4Good UK 50 Index and one subtracted, representing a 1.3 percent turnover. The benchmark
index added such companies as the Body Shop and Safeway.
Performance-wise, the UK Index
dropped 2.75 percent over the previous three months and 4.75 percent over the previous half-year.
The UK 50 decreased 2.72 percent over the previous three months and 4.90 percent over the previous
The European indexes experienced the least variation. The FTSE 4Good Europe
Index turned over only 1.6 percent, with 25 companies being added and only one being deleted. The
FTSE4Good Europe 50 Index did not shift at all. The Europe Index fell 0.26 percent over the
previous three months and 3.66 percent over the previous half-year. The Europe 50 Index dropped
0.34 percent over the previous three months and 3.58 percent over the previous half-year.
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