Byron Kennedy in London
Just two of the five major South African companies listed on the London Stock Exchange will be included in the FTSE 4good indices when they go live at the end of July.
South African Breweries (SAB) and Dimension Data both meet the required standards and are poised to join one of the more prestigious indices in the FTSE 4good UK 50.
Anglo American, BHP Billiton and Old Mutual failed to crack the nod.
All companies that produce tobacco, manufacture weapons or operate or own nuclear power stations are automatically excluded.
It is the latter, says Eiris the company appointed by FTSE to monitor and analyse the validity of social responsibility programmes employed by listed companies that disqualifies Anglo American and BHP Billiton. Both of these global mining houses produce uranium, the metal used to power nuclear reactors.
In addition, companies need to satisfy criteria related to social responsibility to qualify for any of the FTSE 4good indices.
According to Eiris, Old Mutual failed to convince the panel on stakeholder issues. Spokesperson for Eiris, Karen Eldridge, says it wouldn’t come as a surprise if Old Mutual lodged an official objection to its exclusion, along with a number of other blue-chips that were overlooked.
That in itself potentially spells bad news for the South African contingent SAB and Dimension Data currently ranked at 42 and 50 respectively.
The FTSE 4good UK 50 comprises just 50 companies and if market conditions continue to weigh on Dimension Data it would require just one successful objection to relegate the IT services company when the index is reviewed in September.
ENDS