FTSE said the ratings “provide institutional investors with a comprehensive, transparent and objective system to measure the Environmental, Social and Governance (ESG) practices of over 2,300 public companies worldwide,” according to SocialFunds.com.
The report said ESG-related themes on which companies are rated include environmental management, climate change, human and labor rights, supply chain labor standards, countering bribery, and corporate governance. With the exception of corporate governance, each theme classifies companies as high, medium, or low risk, according to their industry sector.
For each theme, FTSE and EIRIS measure corporate performance according to public policy, management systems, and public reporting criteria.
For ten years, FTSE and EIRIS have collaborated on the FTSE4Good Index Series (see “FTSE4Good Index Undergoes Spring Cleaning“).More information is at http://www.ftse.com/Indices/FTSE4Good_ESG_Ratings/index.jsp.