The launch of FTSE4Good on 10 July made major headlines because of the
'perfectly respectable firms' (The Economist, 12/7) that were excluded,
rather than those who made it into the 'ethical' index.
Further surprise was expressed at the seemingly back-to-front notion of
including petroleum companies in a socially-responsible initiative, but
excluding some banks and retailers.
Broadsheet coverage of the launch - which naturally failed to tickle the
tabloids' interest - was predominantly sceptical, as most commentators
remained to be convinced that the notion of ethical investment per se
was not something of an oxymoron.
While the tone of most coverage was negative, there were some positive
messages. The fact that fund managers' licence fees are going to support
the United Nations' children's fund UNICEF was widely reported - though
there was some feeling that this was a bit of a gimmick.
It was also felt that FTSE4Good was the next stage in an evolving
process: 'the movement for ethical, or "socially responsible" investing
(SRI) has been gathering steam' (Financial Times, 11/7)
But the general flavour of the coverage was that this venture had been
ill-thought out by FTSE and the Ethical Investment Research Service. In
an atmosphere in which it would seem hard to please either camp, it was
hard to say who was more critical, the pressure groups, or potential
'The new ethical stock indices have come under fire from trade unions,
charities and environmentalists,' (ananova.com, 12/7) was a common
thread as activists criticised the index for using questionable
Some articles took the launch as a 'naming and shaming' exercise, but
most merely scoffed. The holier-than-thou stance of the index was a
source of much amusement, as was the exclusion of four 'sinful'
industries: arms, tobacco, gambling and nuclear power.
Ian Cowie in The Daily Telegraph (14/7) mischievously turned the launch
on its head and developed his own 'sin-index' showing that banned
companies such as Royal Bank of Scotland (RBS) and Tesco provided larger
This theme was taken up by the usually-sober Lloyd's List (14/7): 'Drink
and drugs are allowed, but there's no smoking' was the paper's take on
the new index's constituents.
- Analysis and commentary by Echo Research. More information can be
found at: www.echoResearch.com.