FTSE Group (“FTSE”), the award winning global index provider today announces the appointment of Sir Mark Moody-Stuart as Chairman of the FTSE4Good Policy Committee. The news follows the recent launch of the FTSE4Good Ratings service and is supported by the publication of a new report, ‘FTSE4Good: 10 years of impact & investment’ following ESG (environmental, social & governance) investment over the last decade and providing exciting new analysis of global trends.
Sir Mark Moody-Stuart will assume responsibility for the committee, which oversees the globally recognised FTSE4Good Index Series. Sir Mark’s role in the FTSE4Good Policy Committee will be pivotal in the evolution of the FTSE4Good Index Series, which has provided investors with a transparent and measureable benchmark for ten years. Sir Mark brings a huge wealth of experience including having chaired the boards of two of the world’s largest companies, Royal Dutch Shell Group and Anglo American plc, and also brings ESG expertise from the board of the UN Global Compact and the Global Reporting Initiative, as well as from being the Chairman of Hermes Equity Ownership Services.
The FTSE4Good Policy Committee has overseen the development and strengthening of the FTSE4Good inclusion criteria to ensure the index continues to lead the debate on responsible investment. During this time, the committee has seen ESG grow from a niche interest, to a significant factor routinely integrated into core investment approaches. Prior to Sir Mark, the late Sir Mervyn Pedelty Chaired the Committee working closely with FTSE’s dedicated Responsible Investment Unit, and grew the influence that FTSE4Good holds in promoting higher standards amongst the world’s leading companies. In Sir Mervyn’s memory, FTSE will be creating an annual ‘Sir Mervyn Pedelty Award’ to recognise leading corporate ESG practices.
Last month FTSE celebrated the 10th anniversary of the FTSE4Good Index Series, with the launch of the ground-breaking FTSE4Good ESG Ratings, in partnership with leading global ESG researcher EIRIS. This extends FTSE’s range of RI services and sits alongside the FTSE4Good, FTSE Environmental Markets and FTSE CDP Carbon Strategy index families.
The Ratings are a new system for quantitatively measuring the ESG risk and performance characteristics of companies, to assist institutional investors with embedding these issues within their investment and stewardship approaches. With the recent introduction of the UK Stewardship Code and with a similar requirement being considered in the current European Commission Green Paper, it also provides a framework for institutional investors to engage companies. The new service will be made available globally and can be integrated with a range of investment management tools and data.
To mark the launch and the 10th anniversary of FTSE4Good, FTSE has published a new report, ‘FTSE4Good: 10 years of impact & investment’. The report outlines the role that the index series has played in improving company practice and ESG standards around the world. The report also looks to the future of ESG analysis and provides a view of current global performance trends.
Key trends and findings covered in the report include:
· Almost a four-fold growth in ESG investments over the decade to $10.1tn
· Independent academic studies from Edinburgh and Nottingham Universities suggest the FTSE4Good Index is a powerful lever for encouraging positive changes among companies
· Over the decade eight new standards have been developed and introduced including for; environmental management, climate change mitigation, human and labour rights, supply chain labour standards and countering bribery
· Over 1000 separate engagements between FTSE and companies regarding the new standards and criteria for them to meet and in over 60% of cases companies have improved practices as a result
· European companies lead with higher average ESG ratings than companies in other regions, with Norway getting the top spot
The full report and sample FTSE4Good Ratings data, including leading companies by supersector and region, are available on the FTSE website.
David Harris, Director of Responsible Investment at FTSE Group said “Sir Mark takes the FTSE4Good Policy Committee helm at an exciting time. The launch of the FTSE4Good ESG Ratings marks a new chapter and provides investors with much more detailed ESG data. With Sir Mark’s distinguished record, expertise and strong convictions regarding the importance of sustainable development, he is ideally placed to guide our work in this area and we are honoured that he has accepted our invitation.”
Sir Mark Moody-Stuart commented "I am delighted to be working with FTSE, EIRIS and the FTSE4Good Policy Committee to encourage continued improvement of the sustainability of the corporate sector and to support investors in better considering these issues. Much has already been achieved, but the real challenge of creating a truly sustainable business and financial industry still lies ahead".