FTSE4Good Index Series

Designed to measure the performance of companies demonstrating strong ESG practices relative to their peers, the FTSE4Good Index Series:

• Assesses corporate sustainability performance: 
  Evaluates how companies manage and uphold sustainability and responsible business practices.
• Measures ESG performance across global markets: 
  Tracks companies across global, developed, emerging, and regional markets that demonstrate strong ESG practices relative to their peers.
• Uses the overall Score from FTSE Russell’s ESG Scores: 
  Comprehensively measures how a company manages relevant ESG risks and impacts to determine eligibility within the FTSE4Good indices.
• Uses a transparent index construction methodology: 
  Provides visibility into the ESG index and scores methodologies, enabling users to understand how companies are assessed, and supports investor stewardship and corporate engagement activities.
• Is aligned with the UN Sustainable Development Goals (SDGs): 
  All 17 SDGs are reflected across the 14 ESG Themes that companies are assessed on for index inclusion.

Examples of local market ESG frameworks include:

• FTSE/JSE Responsible Investment Series (South Africa)
• FTSE Blossom Japan Index Series (Japan)
• FTSE4Good Bursa Malaysia Index Series (Malaysia)

The FTSE4Good indices can be used in four main ways to create or assess sustainable investment products: 

• Financial products - as tools in the creation of ESG index funds, financial instruments or fund products focused on sustainable investment.
• Research - to identify companies with specific environmental and social practices.
• Reference - as a transparent and evolving global ESG index standard against which companies can assess their progress and achievement.
• Benchmarking - as an ESG benchmark index to track the performance of sustainable investment portfolios.

Investors are supported with:  

• Alignment to their holistic ESG values through exclusions or strict criteria for controversial business activities.
• Broad, diversified exposure to companies demonstrating strong ESG practices across the global public equity universe relative to their peers.
• Effective ESG risk assessment through FTSE Russell’s ESG Scores, central to how companies are selected, assessed, and weighted within the FTSE4Good Index Series.
• Enhanced engagement insights through improved transparency that signal progress on transition alignment while providing visibility into constituent company performance and governance.

FTSE Russell’s ESG Scores provide a transparent, data‑driven assessment of how effectively companies manage material ESG risks and impacts. They:

• Are based on an annual review of each company’s publicly disclosed information and provide a structured and comparable measure of ESG disclosures.
• Cover thousands of companies globally: ESG Scores span over 8,000 securities across 47 developed and emerging markets.
• Help investors with a need for flexible, data-driven solutions to assist in managing exposure to ESG aspects, meet mandated stewardship requirements, integrate ESG data into securities and portfolio analysis and implement ESG-aware investment strategies.
• Are aligned with global climate standards, with climate‑related theme scores updated in 2021 to reflect FTSE Russell’s role as the data partner to the Transition Pathway Initiative (TPI).
  

How do the ESG Scores relate to FTSE4Good?

• They determine FTSE4Good index inclusion: a company’s overall ESG Score determines its eligibility for the FTSE4Good Index Series.
• The overall ESG Score breaks down into underlying Pillars and Theme Exposures and Scores.
• The Pillars and Themes are built on over 300 individual ESG performance indicators that are applied to each company’s unique circumstances.

For further details on FTSE Russell’s ESG Scores, visit our dedicated web page. 

To be included in a FTSE4Good Index, companies must meet the defined criteria and ongoing eligibility requirements, which are assessed through FTSE Russell’s ESG performance indicators.

• Minimum ESG score thresholds: 
  Companies must meet FTSE Russell’s prescribed minimum ESG Scores, demonstrating effective management of material ESG risks relative to sector and market peers.
• Comprehensive indicator‑level assessment: 
  Scores are derived from hundreds of publicly available data points across environmental stewardship, human rights, labour standards, governance practices, climate risk and more, capturing a company’s overall approach rather than isolated policies.
• Strict exclusions for high‑risk activities: 
  Involvement in sensitive or controversial areas (e.g., tobacco, controversial weapons, thermal coal) renders a company ineligible for a FTSE4Good Index, regardless of score—preserving the integrity of the benchmark.
• Ongoing controversy screening: 
  Companies are monitored for major ESG controversies or breaches of sustainability norms; serious incidents can prevent inclusion or result in removal at the next review, helping ESG index funds and other financial instruments maintain exposure to companies aligned with FTSE4Good standards.

Several regional and market specific frameworks are aligned to the FTSE4Good methodology and use the same underlying ESG performance indicators.

• Local market ESG frameworks:
  Developed for specific regional markets — such as Malaysia, South Africa, and Japan — these index families are built using the same FTSE Russell ESG Ratings model that underpins the FTSE4Good Index Series.
• FTSE/JSE Responsible Investment Index Series (South Africa):
  Designed with the Johannesburg Stock Exchange, this ESG index series applies FTSE Russell’s ESG Ratings to identify South African companies with leading ESG practices, enabling local investors to integrate responsible investment principles into domestic equity exposure.
• FTSE Blossom Japan Index Series (Japan):
  Built on the FTSE Japan All Cap and the JPX TOPIX universe, these indices identify Japanese companies demonstrating strong ESG practices and apply industry or sector neutral weighting. They support stewardship goals, climate transition alignment, and are widely used in Japan’s responsible investment market-cap or sector neutral weighting. The FTSE JPX Blossom Japan Sector Relative Index also incorporates the Transition Pathway Initiative (TPI) Management Quality Score for companies in high emission sectors, allowing only those demonstrating credible climate transition preparedness to be included.
• FTSE4Good Bursa Malaysia Index Series (Malaysia):
  Developed with Bursa Malaysia, this index series covers all eligible Bursa Malaysia Main and ACE Market companies and segments the market into large, mid, small cap, fledgling, and Shariah‑compliant categories. FTSE4Good Bursa Malaysia indices enable investors to measure and invest across these distinct segments, while identifying companies with recognised corporate responsibility practices.

• Consistent ESG foundation across all frameworks:
  Although branded differently, both the JSE and Blossom frameworks use the same underlying FTSE ESG data model as FTSE4Good, ensuring consistency, transparency, and comparability in how companies are assessed globally.
• Enable ESG integration tailored to local markets:
  Each framework reflects local disclosure standards, investor priorities, and regulatory expectations—helping market participants integrate responsible investment principles while remaining aligned to global ESG standards.

• A family of FTSE4Good ESG index variants:
  FTSE Russell provides a broad suite of FTSE4Good index variants across global, developed, emerging, and regional markets—such as FTSE4Good Developed, FTSE4Good Emerging, FTSE4Good All World, and partnership ESG indices including FTSE4Good Bursa Malaysia, FTSE4Good ASEAN 5, and FTSE4Good TIP Taiwan. These variants apply consistent ESG performance indicators to maintain transparency and comparability.
• A growing range of ESG ETFs and index funds: 
  FTSE4Good indices serve widely as benchmarks for ESG index funds, ESG ETFs, and other passive sustainable investment products, supported by transparent rules and strong investability criteria.
• Maintenance of investability and stewardship signals:
  All FTSE4Good variant ESG indices incorporate market capitalisation weighting and clear eligibility thresholds based on FTSE Russell’s ESG performance indicators. This ensures the FTSE4Good index family remains investable while reinforcing stewardship expectations through exclusions and regular reviews.
• Flexible integration into passive strategies:
  Variant indices enable investors to incorporate ESG considerations into passive portfolios while maintaining broad exposure to companies with stronger ESG profiles.

• Built on enduring principles: 
  As it approaches its 25th anniversary in 2026, the FTSE4Good Index Series remains grounded to its founding principles — transparency, high quality data, robust governance, and continuous innovation — which remain central to FTSE Russell’s sustainable investment index suite.
• Established early ESG benchmarks: 
  From launch, FTSE4Good helped set early standards for measuring ESG performance indicators consistently across global markets.
• A globally recognised ESG benchmark family: 
  Over 25 years, FTSE4Good has grown into a widely recognised ESG index family and is entering a new phase marked by rising sustainability related regulation and continued methodology innovation.
• A foundational role in responsible investment: 
  As one of the longest established ESG index series, FTSE4Good plays a foundational role in advancing responsible investment. Its transparent scoring model, alignment with global standards and deep data history make it a leading reference point among ESG benchmarks.
• Delivers consistent, comparable insights: 
  By providing clarity and comparability on corporate sustainability performance, the FTSE4Good Index Series supports more informed decision making —across strategies and market conditions—within the global ESG indices ecosystem.
• Continued innovation: 
  As it approaches its 25th anniversary, the FTSE4Good Index Series is entering a new phase with increasing regulatory focus on sustainability, and ongoing methodology innovation.