208 companies face deletion from FTSE4Good

Index provider FTSE Russell has identified 208 existing constituents of the FTSE4Good All World that have failed to meet new climate performance standards first introduced at the FTSE4Good 2021 semi-annual index review.

The changes, which also set minimum climate scores for FTSE4Good index inclusion, give constituents until the June 2022 semi-annual index review to meet the required standard or be deleted from FTSE4Good Index Series.

FTSE Russell has utilised Transition Pathway Initiative’s (TPI) methodology for analysing the climate performance of listed companies to determine the Climate Change Score. Thresholds are determined by FTSE Russell’s classification of developed and emerging markets, as well by a company’s sub-sector classification, with the most carbon intensive sectors set higher standards. The changes to the methodology also include aligning the Climate Theme of FTSE Russell’s ESG Ratings product with TPI. ESG Ratings scores are determined using over 300 individual indicators across 14 themes.

In July 2020, FTSE Russell issued a market consultation on whether to revise its climate standards for the FTSE4Good index series in recognition of the growing importance of climate considerations in ESG indexes. Respondents were overwhelmingly supportive of the proposed enhancements to the existing Climate Change theme within FTSE Russell’s ESG Ratings.

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