1	"Jayn Harding," Jayn Harding, Head of CSR FTSE Group, January 2005
2	Overview Overview of the FTSE4Good Index Criteria and Company Selection Process New Supply Chain Labour Standards Criteria
3	FTSE4Good Index Series FTSE believes in future, company’s success will be measured by more than just financial performance
4	FTSE4Good Objectives A basis for socially responsible investment products: Provides a performance measurement tool for investors and market commentators To provide a tool for companies to proactively identify and manage opportunities and risks associated with CR: Contribute to the development of responsible business practice around the world. Provide a globally accepted standard for corporate responsibility as supported by investors and other stakeholders And……..
5	FTSE’s support of
6	FTSE4Good Selection Process & Construction
7	FTSE4Good – Index Review & Company Selection
8	FTSE4Good model
9	Environmental criteria
10	Human Rights criteria
11	Social and Stakeholder Criteria
12	Engagement with companies In order to keep up-to-date new criteria are developed for the index; this has included: Tougher environmental criteria (launched 2002) Tougher human rights criteria (launched 2003) New Supply Chain Labour criteria (launched 2004) Next, Bribery and Corruption When FTSE has introduced the criteria this has also included an engagement program whereby FTSE contacts affected companies to ensure they understand the criteria and the deadlines. FTSE has been very impressed with the response from companies. The next slide provides an example of this response from companies around the World.
13	Companies operating in countries of human rights risk 93 companies affected: - In April 2003, only 33 companies met the new criteria - By March 2004: 76 now meet the Policy criteria
14	Number of Companies in FTSE4Good Index Series
15	Supply Chain Labour Standards
16	Supply Chain Labour – why develop FTSE4Good criteria? The issue of supply chain labour standards is rising up the agenda around the World and this has been recognised by the FTSE4Good Policy Committee There is a need to keep FTSE4Good Index up to date, and in line with investors needs to ensure that significant risks are managed The current Human Rights criteria do not address these issues as they mainly relate to direct company impacts Companies are increasingly expected to take responsibility for supply chain labour standards even thought these occur further down the chain (ie are indirect impacts). Therefore FTSE has developed criteria for FTSE4Good supply chain labour standards
17	Supply Chain Labour Standards – Issues High impact companies: highly visible global brands face more public scrutiny Fast moving consumer products: need to strike balance between managing costs (efficiency/productivity) while operating responsibly Often sourced from countries where labour standards and rights are less well developed Supply chain labour concerns (on worker exploitation) have been identified by international organisations (most importantly, the ILO) these include: Child labour and forced labour Discrimination and inequality Not allowing workers the freedom to associate, or collectively negotiate Health & Safety Wages and working hours
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19	FTSE4Good Criteria - Design Based on international standards recognisable by consumers, investors and other stakeholders
20	Risk Relativity Assessment
21	Minimum Criteria 1^st July 2005
22	Final Policy and Systems 1^st July 2006
23	Reporting 1^st January 2007
24	Summary Supply chain labour standards are an increasing concern around the world with investors and consumers alike. FTSE4Good Supply Chain Labour Standards criteria developed based on internationally recognised standards that are already embraced by many companies 80% agreement on proposed criteria from FTSE’s public consultation. Criteria based on risk relativity to companies so should help those companies in developing supply chain management frameworks on a good practice model Criteria offer companies a choice in how to implement, reflecting the different methods companies will take to properly address these issues
25	FTSE4Good Index www.ftse.com/ftse4good jayn.harding@ftse.com