Around 208 companies may be thrown out of the FTSE 4Good index series for failing to meet more stringent environmental standards. Ratings agency FTSE Russell has given the companies 12 months to meet its tighter climate-performance standards or face deletion from the indices. The new climate standards are based on parameters drawn up by the Transition Pathway Initiative, which assesses business preparedness for the low-carbon economy. Companies in “primary impact subsectors”, like fossil fuel, forestry, mining, transport and utilities, must show that the risks and opportunities of the transition to a low-carbon economy are integrated into their operational decision making. All other developed market companies need to show they are “building capacity” towards this, and that their carbon emissions targets are aligned with the 2015 Paris Agreement.

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Financial Times