The FTSE4Good Index series, launched in July 2001, measures the performance of UK companies that meet globally recognised corporate responsibility standards. It is similar to the FTSE All Share index, which lists shares according to market capitalisation (price of the share x number of shares in issue), but excludes tobacco, nuclear power and arms industries.

In the UK the FTSE4Good indices, has a criteria for stock selection which includes the environment, universal human rights, social issues and stakeholder relations. The US equivalent is the Domini 400 Social Index, which is a socially screened version of the Standard & Poor's 500-stock index.

The management and the evolution of the FTSE4Good Index Series is placed under the direction of the FTSE4Good Policy Committee, an independent body of experts from the fields of corporate responsibility, fund management, academia and the business community. The FTSE4Good Policy Committee's role is to:

The index initially excluded Tesco on the basis of its failure to publish an environmental report. The index has consistently increased the rigour applied to companies hoping to list on the index. Nevertheless, some ethical investors point to the inclusion of oil companies as evidence of a "light green" approach.

To find out more, visit www.ftse.com/ftse4good.

Other indices

Dow Jones Sustainability Indexes are global indexes tracking the financial performance of the leading sustainability-driven companies worldwide. They provide asset managers with reliable and objective benchmarks to manage sustainability portfolios.

Corporate Responsibility Index is a benchmark of responsible business, helping companies to integrate and improve responsible management across their businesses, and providing a systematic approach to managing, measuring and reporting their impacts on society and the environment. It is run by Business in the Community, an organisation with a membership of companies aiming at implementing corporate values and commitments into mainstream management practice. Their membership comprises over 70 of the FTSE 100 companies with a further 2,000 engaged through a network of 90 global partners.

Trucost is an independent environmental research company which assesses companies' carbon emissions and impact on the environment. Trucost have also developed a carbon optimised portfolio which mirrors the sector weighting of the FTSE 350 index but rebalances companies' weightings within the index with overweighting of less carbon intensive companies and underweighting of more carbon intensive companies. The result is a portfolio which loses no significant performance relative to the FTSE 350 - but with a carbon footprint 41% lower than the FTSE 350. This helps to demonstrate that performance need not be compromised by environmental concerns.