FTSE Group, manager of the FTSE4Good Index series of responsible investment products, has launched a new data service to objectively measure the environmental, social and governance practices of over 2,300 public companies worldwide.
The new FTSE4Good ESG Ratings are designed to provide institutional investors with a flexible and granular scoring model which will help them understand a company's ESG practices. FSTE says the rating will cover multiple dimensions of a company's practices, measuring against six ESG themes, including environmental management, climate change, human and labor rights, supply chain labor standards, corporate governance and countering bribery.
The firm said the new ratings will provide a tool for active portfolio management, manager selection, company engagement, risk management, company research and corporate ESG benchmarking.
The new ratings criteria are publicly available and follow a clearly defined methodology, FSTE says. The firm said they are over seen by an independent committee made up of experts in the investment community, academia, the business community, unions and NGOs. The ratings are re-assessed twice a year.
"The new ratings service provides an easy to use and objective measure of corporate ESG practice and risk," said Mark Makepeace, Chief Executive of FTSE Group. "Today we are also highlighting those companies that, based on our Ratings, have leading ESG practices."