The benchmark that set the ESG standards
Twenty years ago, a new kind of equity index was introduced amidst considerable public skepticism. The FTSE4Good index series, launched in 2001, used transparent metrics of environmental, social and governance (ESG) performance to select its constituents, incentivizing companies to improve their sustainability practices.
Some regarded the approach of the new index as a fad. At the time, many investment professionals still considered ESG issues as irrelevant, and at worst as detrimental to returns.
Two decades later the capital markets and investment approaches have changed beyond recognition. Financial institutions around the world now incorporate sustainability into their philosophy and processes as a matter of course.