The Financial Performance of the FTSE4Good Indices

David J. Collison, George Cobb, David M. Power, Lorna A. Stevenson

    Research output: Contribution to journalArticlepeer-review

    56 Citations (Scopus)

    Abstract

    This paper examines the financial performance of the FTSE4Good indices; the indices include companies from different geographical areas on the basis of pre-determined social responsibility criteria: currently environmental sustainability, relationships with stakeholders, attitudes to human rights, supply chain labour standards and the countering of bribery. The results indicate that over the period of analysis from 1996 to 2005 these indices outperformed their relevant benchmarks. However, most of this outperformance was due to risk differences between the FTSE4Good indices and their benchmarks. In addition, much of the outperformance arose in the period before the indices could be used by practitioners. Nevertheless, the results suggest that investors who invest in a portfolio of companies that satisfy FTSE4Good's corporate social responsibility criteria do no worse than their counterparts who do not follow a socially responsible strategy when purchasing equities. Copyright (C) 2007 John Wiley & Sons, Ltd and ERP Environment.

    Original languageEnglish
    Pages (from-to)14-28
    Number of pages15
    JournalCorporate Social Responsibility and Environmental Management
    Volume15
    Issue number1
    DOIs
    Publication statusPublished - 2008

    Keywords

    • FTSE4Good
    • financial performance
    • ethical investing
    • corporate social responsibility
    • socially responsible investing

    Cite this