Ethical Performance
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companies covet a place in NPI’s index

May 1999

NPI Asset Management says it is being approached by growing numbers of top-ranking companies wanting to be included in its social index.

The NPI Social Index tracks the performance of 150 UK companies and four investment trusts from the FTSE All-Share Index assessed as being most effective in managing their environmental and social impact.

NPI researcher Toby Belsom said the approaches were ‘encouraging’. They suggested many more companies were now keen to improve their ethical performance.

‘A number of companies have been telephoning to ask if they are on the index and if not, why not,’ he said. ‘In its own way the index is applying pressure to companies.’

The basket of qualifying firms has outperformed the FTSE All-Share Index between its launch in July 1998 and the end of January 1999, except for a brief period during the launch month.

NPI would like to keep to its base of around 150 companies, but says there is no barrier to new companies being brought in – or existing ones being removed.

‘The index is not a black and white thing, and we fully recognise there are shades of grey,’ said Belsom. ‘Companies outside the list are doing some exciting things, but on balance we’ve used a best in class approach.

‘When companies outside the index have phoned us we’ve generally given them the opportunity to speak to us about their environmental and community initiatives and to put their case. We might then send them the profile of their company we have built up and ask them to comment on it, then maybe we will review the situation.’




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