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Index Change Advice – 20190228 FTSE JSE Responsible Investment Ground Rules Controversy Monitoring
FTSE/JSE Responsible Investment Index Series - Ground Rule Update
28 February 2019
FTSE Russell would like to inform clients of the following update to the FTSE/JSE Responsible Investment
Index Series which will be effective from the June 2019 Index Review.
Section 5: Index Qualification Criteria - addition of the following rule:
5.3 Controversy Monitoring
The FTSE Russell controversies assessment complements the ESG Ratings in formulating the
FTSE/JSE Responsible Investment Index Series. The treatment of companies by the controversies
assessment differs depending on whether the company is a current constituent or not.
5.3.1 Non-constituents
Companies identified as having significant controversies are not added to the FTSE/JSE
Responsible Investment Index Series at review and are placed on a watchlist. The watchlist is
determined through a process which systematically analyses the seriousness of ESG incidents,
criticism, and allegations against companies and projects worldwide to determine how
controversial a company is. The top five percent of companies in the FTSE All World universe with
the most significant allegations are included in the watchlist at a review and are not added to the
FTSE/JSE Responsible Investment Index Series. The watchlist also includes companies where any
of the world's largest asset owners (top 20 by assets under management) currently take a public
stance in excluding that company from their portfolios on the basis of environmental, social or
governance concerns.
5.3.2 Current Constituents
FTSE Russell monitors news outlets for controversies in which current FTSE/JSE Responsible
Investment Index Series constituents are implicated; this controversies assessment is based on
two defining parts, an Exposure based on significance and a Score focused on quality of response.
The Assessment is applied in a systematic manner and constituents are suspended from the
FTSE/JSE Responsible Investment Index Series for a period of two years where the Assessment
breaches a threshold level that equates to the most extreme ESG controversies. Following a two
year suspension a company must demonstrate that it has taken appropriate action to rectify the
effects of the controversial incident and prevent a reoccurrence before it can be permitted to re-
enter the FTSE/JSE Responsible Investment Index Series, subject to meeting all other criteria.
For further information on controversy monitoring please see the FTSE4Good Index Series
Ground Rules.
An updated copy of the FTSE/JSE Responsible Investment Index Series Ground Rules (v1.8) is now
available using the following link: FTSE/JSE Responsible Investment Index Series
Or on the FTSE Russell website: www.ftserussell.com
For further information please contact FTSE Russell Client Services at info@ftserussell.com or call:
Australia +1800 653 680
Hong Kong +852 2164 3333
Japan +81 3 4563 6346
London +44 (0) 20 7866 1810
New York +1866 551 0617
Johannesburg +27115207000
Alternatively please visit our website at www.ftserussell.com
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Date: 28/02/2019 05:10:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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