Integrity and trust are at the core of what we do.
Core to our strategy is ensuring that corporate responsibility is aligned to our overarching business strategy and governance principles.
Our approach to corporate responsibility
FTSE Russell considers environmental, social and governance issues of critical importantance to our business and to capital markets. As part of London Stock Exchange Group (LSEG), our corporate responsibility (CR) strategy and policy is set out in the London Stock Exchange Group’s Corporate Responsibility Strategy. LSEG’s approach is founded on four pillars, which are the areas where we believe we can have the most impact and add the most value. These pillars are integral to how we operate as a business: Our Markets, Our Services, Our People and Our Communities. FTSE Russell’s Chief Executive Mark Makepeace chairs the LSEG CR Committee as well as the Our Services CR Pillar.
As we continue to expand around the world, we have taken steps to manage our business impacts and to conduct our activities in the wider community in a responsible way. For more information about our CR performance on Environmental, Social and Governance matters, download the London Stock Exchange Group’s Corporate Responsibility Report.
Core to our strategy is ensuring that CR is aligned to our overarching business strategy and governance principles. Through our index and benchmarking services, we provide clients with the tools to enable them to make better informed investment decisions, and to help them understand and manage risk for themselves and society as a whole. Our customers increasingly require products and services to support the integration of environmental, social and governance (ESG) factors into their investment decisions and stewardship approach. We remain at the forefront of developing products such as ESG indexes and analytics.
We have dedicated ESG and LCE (low carbon economy) units, with expertise spanning European, North American and Asian markets. Members of these units play active roles in all major regional sustainable investment industry associations. As a founding signatory, FTSE Russell helped develop the United Nations-backed Principles on Responsible Investment. Having launched the FTSE4Good Index Series over a decade ago, the team has expanded the Index Series, overseen ongoing enhancements to the standards applied and introduced new index families and ESG products.
Promoting future-oriented asset classes
Through our Environmental Markets indexes, such as the FTSE Environmental Opportunities Index, we help investors to identify and gain exposure to firms in seven environmental market sectors: renewable and alternative energy; energy efficiency; water infrastructure and technologies; pollution control; waste management and technologies; environmental support services; and food, agriculture and forestry.
Enabling sustainable investment
FTSE Russell’s ESG indexes and Ratings service help to promote global CR standards and enable market participants to integrate sustainability into their investments and support the transition to a low carbon economy.
- FTSE4Good Index Series. FTSE Russell has played a pioneering role in developing ESG indexes through the FTSE4Good Index Family, which comprises companies demonstrating strong ESG performance. With advice and direction from the independent FTSE4Good Advisory Committee, and supported by an evolving criteria platform and direct company communication programme, FTSE4Good has had a significant and measurable impact on the behaviour of companies worldwide while providing investors with a tool for benchmarking and tracking ESG-driven funds. The index family spans 13 benchmarks and tradable indexes covering different regions.
- FTSE ESG Ratings The Ratings provide investors with a flexible and granular scoring model, enabling them to understand a company’s ESG practices in multiple dimensions and to integrate ESG considerations into investment decisions and stewardship approaches.
- FTSE Environmental Markets Series Launched in 2008 in partnership with Impax, this series is based around the FTSE Environmental Markets Classification System, which categorizes companies into seven sectors and 29 sub-sectors, according to the types of environmental products or services they provide. These include renewable and alternative energy, energy efficiency from enhanced energy storage to smart grid technology), pollution control, water technology and infrastructure, and waste and recycling technology.
- FTSE Russell Green Revenues (LCE) data model The LCE data model measures the green revenues of 13,400 public companies, representing 98.5% of total global market capitalization. Revenues from a broad range of large, mid and small capitalization companies in 48 developed and emerging markets are mapped to 60 new green industrial subsectors, with FTSE Russell assigning each company in the model a low carbon industrial indicator (LOWCII) factor, representing the ratio of its green revenues to its total revenues.
- FTSE Developed ex Fossil Fuels Index Series Market participants are increasingly looking to manage carbon exposure in their investments and to reduce write-off or downward revaluation risks associated with stranded assets. Stranded assets are fossil fuel deposits that could become uneconomic to extract under certain regulatory responses to climate change. Launched in 2014, the FTSE Developed ex Fossil Fuels Index Series is a capitalisation-weighted index series designed to represent the performance of constituents of the FTSE Developed Index after excluding companies that have certain revenue and/or reserve exposure to fossil fuels.