FTSE4Good (Footsy for Good) is the name given to a special share index that lists the names of companies with good records of corporate social responsibility. Companies in the index have to satisfy three criteria before they can be considered:
• Working towards environmental sustainability
• Developing positive relationships with stakeholders
• Upholding and supporting universal human rights
The London-based index has recently been looking “Down Under” for candidates and has come up with sixteen Australian companies that meet those criteria. They have chosen AMP, ANZ, AGL, Fosters, Gandel Retail Trust, General Property Trust, Macquarie Bank, MIM Holdings, National Australia Bank, News Corp, Southcorp, Suncorp-Metway, Tabcorp, Telstra, Westpac and Woolworths.
FTSE How Good?
The list is interesting in that one of those companies, Tabcorp, is involved in a business which many people would consider unacceptable from a social perspective - gambling. The main FTSE4GOOD index has included Tabcorp because it’s the best of its sector. This approach is a “positive screen” approach where the best company in each sector is selected irrespective of its core activity. It ensures that a portfolio of shares will have all sectors represented but may not meet wider ethical concerns. Many fund managers who offer Socially Responsible investment options also screen out “undesirables” such as companies involved in tobacco manufacture, uranium mining or armaments.
FTSE4GOOD provides lists which have been further screened as does a competitor, Dow Jones. In addition to the Dow Jones Sustainability Index, Dow Jones provides five specialised lists, which exclude companies involved in alcohol, gambling, tobacco, armaments and firearms.
According to Dow Jones Indexes, the Sustainability World Index annual performance for the five years to December 2001 was 6.32% per annum whilst the “ordinary” index figure 3.70% per annum. A recent Social Investment Forum survey estimates that more than one out of very eight dollars under management in the United States is influenced by ethical considerations. There are over fifty funds in the UK offering this style of investment and a steadily growing number in New Zealand.
If you have Funds (over NZ$350,000) to invest and want truly impartial advice, contact us to find out how we can put your money to work to fund your important goals.
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