Suncorp Group has joined the FTSE4Good Index, taking the financial services sector to more than half of the Australian index.
At the same time, FTSE has expanded its supply chain labour standards criteria to encourage improvements in company environmental, social and governance standards.
The index began 10 years ago, and now covers almost 400 companies globally. In the September semi-annual review, seven companies were deleted (none from Australia) and 21 were added (three from Australia: Suncorp, Coca-Cola Amatil and Tatts Group).
A Suncorp spokesperson said responsible management of financial, social and environmental performance was integral to the group's way of doing business and shaping operations for the future.
"Over the past few years we've demonstrated our commitment to running a responsible company and improved the way we communicate with our key stakeholders. We have also developed our non-financial reporting capability," the spokesperson said.
"We're proud of our achievements in reducing our environmental impact, promoting a flexible and diverse workplace and the many volunteering, sponsorship and community investment programs we have initiated.
"We've also strengthened our company's balance sheet and returned a special dividend to shareholders this financial year."
The inclusion of Suncorp in the index showed the approach was "effective and meeting the expectations of those looking for responsible investment opportunities", they said.
FTSE Australia director Julie Andrews said companies not taking responsibility for the working conditions in their supply chain could face major risks to their reputation and brands.
"This also represents a potential risk to investors in these companies through revised valuations," Andrews said.
The criteria identified companies facing these risks, placed them in risk categories and assessed how well they managed the issue.
When begun a decade ago, the index applied the supply chain labour standards criteria only to companies that produced clothing, accessories, footwear, toys and food products.
FTSE has now extended the criteria to companies providing:
. consumer and office electronics: televisions, computers, music systems, mobiles, printers and photocopiers,
. home products: furniture, towels and bed linen, and
. other consumer products: jewellery and watches.
Financial services groups in the FTSE4Good Index Australia (alphabetical order):
1. AMP
2. ANZ Banking Group
3. ASX
4. CFS Retail Property Trust Group
5. Commonwealth Bank of Australia
6. Dexus Property Group
7. GPT Group
8. Insurance Australia Group
9. Mirvac Group
10. National Australia Bank
11. QBE Insurance Group
12. Stockland
13. Suncorp Group
14. Westfield Group
15. Westfield Retail Trust
16. Westpac Banking Corp.
