Tuesday, 21 September 2010

FTSE boots BP out of ethical index

13 Sep 2010

BP has been kicked out of the FTSE4Good index for ethical companies, the latest but by no means greatest repercussion facing the oil giant in the aftermath of the Gulf of Mexico oil spill. FTSE Group confirmed the deletion of BP in its semi-annual review last week, citing the company's poor response to the oil spill, as well as "the environmental and social impact and its history of similar incidents". The deletion is the most recent sanction on BP, which was taken off Dow Chemical Jones' sustainability index and then dropped from Calvert Investments ethical SAGE fund in June.

However, BP was not the only firm to be deleted from the index. FTSE4Good's review also announced plans to evict two construction firms - Morgan Sindall and Taylor Wimpey - for failing to comply with climate change criteria, and said it was deleting a further five companies for not meeting the FTSE4Good human and labour rights criteria. Changes to the index will kick in after the close of the markets on Friday 17 September, said the group.

FTSE4Good is also adding 13 more firms to the list, including Spanish energy giant Iberdrola, which has become the first nuclear power generator to meet FTSE4Good's new nuclear power criteria. Despite the controversy surrounding nuclear power. FTSE4Good said it had decided nuclear power had a "legitimate" but temporary part to play as countries switch to low-carbon energy supplies.

To be eligible to join the index, nuclear power generators have to meet strict criteria on nuclear safety and waste disposal in the areas of policy, management, reporting and performance. "Iberdrola is the only nuclear power generator globally to meet to the new criteria", a FTSE spokeswoman told BusinessGreen.com. "However that doesn't exclude other nuclear power companies from the list. In fact, we'd encourage more to come forward". Of the 12 other firms set to join the FTSE4Good Index, three are from the UK - telco TalkTalk, and landlord groups Grainger and Unite.