The Confederation of British Industry (CBI) has joined environment lobbyist group Friends of the Earth to warn about the FTSE4Good index, which was launched yesterday.
The index will apply to the mainstream corporate sector, using best practice criteria based on company progress on environmental sustainability, relationships with stakeholders and support for human rights.
Commenting on the index, CBI deputy director-general, John Cridland said: Although we appreciate that FTSE is providing information that some investors want, we are seriously concerned about how this index will be perceived by the media, the general public and companies themselves. There's a danger that firms included might be seen as 'good' and those left off as 'bad'.
In addition, companies have had no opportunity to see in advance the criteria against which they're being judged and they're unlikely to have confidence in the index while the advisory committee is not fully representative of wealth creators.”
Cridland nevertheless welcomed the fact that FTSE made the criteria more specific to the companies being assessed.
By Janet Du Chenne
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