Human rights campaigners have criticised the London Stock Exchange Group for including G4S on ethical investment indices, after the British security company was accused of contributing to human rights violations.
The FTSE4Good index, run by the London Stock Exchange Group’s FTSE Russell subsidiary, has included G4S for the past three years.
During that time, G4S, one of the world’s largest public sector employers, with 546,000 employees in 90 countries, has been at the centre of multiple controversies over its treatment of workers.
In September, it said it will end its involvement in the immigration and asylum sector following a scandal at a detention centre near Gatwick.
Norway’s $1.1tn (£850bn) government pension fund last week announced it had excluded shares in G4S from its investment portfolio, after its ethics watchdog found an “unacceptable risk of the company contributing to systematic human rights violations” among workers in the Middle East.
On Sunday the Labour party criticised the company following the revelation that a board member helped to set the UK’s minimum wage.
Vaidehee Sachdev, a senior research manager at ShareAction, which campaigns on responsible investment, called on FTSE Russell to remove G4S until it showed progress on improving its human rights record.
“Even before Norway’s deeply distressing findings, the company’s human rights record was questionable,” she said. “People who want to do good with their money would rightly be horrified to be invested in a company that fails to meet basic human rights standards.”
Index providers such as FTSE Russell are highly influential in the investment industry, and so-called ethical indices, which claim to exclude companies on environmental, social or governance grounds, have grown in popularity in recent years.
Peter Frankental, Amnesty International UK’s economic affairs programme director, said ethical indices are often “little more than soft corporate PR – reliant on partial and outdated information, rather than anything genuinely independent”.
He said: “Norway’s sovereign wealth fund is likely to offer a better assessment of whether G4S is actually doing enough to root out modern forms of slavery from its Gulf supply chains.”
FTSE Russell’s largest competitors, including MSCI, S&P Global Dow Jones and Deutsche Börse’s Stoxx, do not include G4S on their ethical indices.
G4S in September said its inclusion on FTSE4Good highlighted its contribution on the United Nations’ eighth sustainable development goal, which calls for “immediate and effective measures to eradicate forced labour, end modern slavery and human trafficking”, and to “protect labour rights and promote safe and secure working environments for all workers, including migrant workers”.
However, Norway’s Council of Ethics found that some of G4S’s employment practices were indicators of forced labour, a type of modern slavery, under the conventions of the UN International Labour Organisation.
Migrant workers mainly from India, Pakistan and Nepal – working in Qatar and the United Arab Emirates – were routinely subjected to misinformation about working conditions, restrictions on freedom of movement and “debt bondage” from high recruitment fees, the council found.
G4S last week said it had investigated the council’s findings and that it was making progress on improving its employment practices.
The London Stock Exchange Group declined to comment.