Ethical Performance
inside intelligence for responsible business
accompanying image


FTSE4Good sorts the sheep from the goats

April 2007

European oil and gas companies have consistently outperformed their US counterparts on social and environmental issues for at least the last 12 months, FTSE data suggests.

US oil and gas majors account for nine per cent of the FTSE US Index by industry weighting, but just 0.1 per cent of the FTSE4Good US index, which screens out the poor social and environmental performers.

European oil and gas companies, by contrast, have the same industry weighting in FTSE Developed Europe, but are over-represented in FTSE4Good Europe, accounting for 10.6 per cent of the index. The disparity in non-financial performance between US and European companies is particularly marked in oil and gas, with only the utility sector showing greater variation.

The figures give no indication that US companies are closing the gap.

David Harris, manager for responsible investment at the FTSE Group, told EP that the disparity was in part due to the tightening of FTSE4Good’s human rights and environmental criteria, which had led to a number of companies falling out of the index family. Sunoco is now the only US oil and gas company in FTSE4Good US. FTSE4Good Europe includes 11 oil and gas companies, several of which have shown improved performance. They include BG, Cairn Energy, Lonmin, Norsk Hydro, Repsol, Statoil and Total.

In terms of financial return, the European companies did better than their US counterparts between 2002 and 2005 and have since underperformed.

Further Information
3BL Media News
Sign up for Free e-news
Report Alerts
Job Vacancies
Events Updates
Best Practice Newsletter