Ethical Performance
inside intelligence for responsible business


FTSE4Good prepares health & safety criteria

June 2009

One of the world’s main socially responsible investment indices is to introduce criteria on health and safety that companies will have to meet for inclusion.

The new health and safety requirements, which should be finalized in 2010, will include stipulations on the way businesses must tackle HIV/Aids and will be based on  various international standards.

Draft requirements for the criteria have been split provisionally into four categories – policy, systems, reporting and performance. The document proposes that FTSE4Good indices require companies to show evidence of, among other things, an employee safety policy and a senior health and safety officer; health and safety performance monitoring including regular health and safety audits; the extension of the policy to contractors at company facilities; industry-specific programmes on workers’ safety; certification to a recognized international health and safety standard; and public reporting on accidents, including lost time and fatalities figures.

Another requirement is that fatalities should not increase over an average of two years.

Separate HIV and Aids criteria will require a public workplace policy to prevent the spread of the virus, the provision of working time and sick leave flexibility for infected workers, and programmes to educate workers and their spouses about HIV/Aids prevention.

Initially the main health and safety criteria will only have to be met by companies deemed by FTSE to be most exposed to health and safety risks – such as those that use heavy machinery on a large scale, already have high accident rates, and operate in countries with low labour standards. High-risk sectors are likely to include companies in construction and materials, chemicals, electricity and mining.

The criteria on HIV/Aids will also be applied initially to businesses with a higher risk in that field, such as those that operate in countries with an HIV/Aids prevalence rate of more than three per cent of the population, and companies that employ low-skilled labour in large numbers.

Consultation on the proposed criteria ended last month.

The FTSE consultation document says health and safety is a key indicator for investors, and it has therefore always planned to introduce criteria that will highlight those with the best records but will also encourage companies to improve their performance. ‘In addition to being an issue with significant public interest, health and safety also represents serious risks to company reputations, the licence to operate, and employee and company relations, as well as the likelihood of resultant fines and litigation,’  it said.

Since it began in 2001 the FTSE4Good index series has reviewed its criteria for environmental management and human rights, while new criteria have been established for supply chain standards, bribery and climate change. In addition to the new requirements, the latest consultation document makes best practice recommendations in every area of health and safety.

FTSE Group | Global | SRI

Further Information

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