Index provider FTSE is launching a family of socially responsible investment indices this summer in conjunction with EIRIS, the ethical investment research service.

Known as FTSE4Good, the indices comprise both a tradable and a broad benchmark index for four regions- the UK, Europe, the US and global.

Companies will be assessed on four criteria- the environment, human rights, social issues and stakeholder relations and the exclusion of certain business practices- to see if they are eligible.

Mervyn Pedelty, chief executive of the Co-operative Bank, is chairing an advisory committee of fourteen independent members that will decide companies’ eligibility and, according to Mark Makepeace, FTSE’s CEO, its findings should be known by May.

Makepeace says over half the companies for each region will probably fail to come up to scratch and that those involved in tobacco and the export of weapons are likely to be excluded.

The tradable indices will eventually include 100 companies while the benchmarks’ constituents will vary according to the number eligible.

Indices will be based on market capitalisation to appeal to retail and institutional investors and will be reviewed every six months.

Licensing revenues from the FTSE4Good indices will be donated to UNICEF and FTSE had pledged 50 pence (e0.8) for every screen showing its indices, a move that should raise $1m for UNICEF in the first twelve months.

FTSE intends to launch the benchmark indices for the UK and Europe and all the tradable indices by June while the global and US benchmark indices should go live by the end of the year.

“FTSE4Good represents an aspirational framework for change. We want it to be a step towards encouraging companies to adopt socially responsible principles,” says Makepeace.

Close Fund Management, the fund management subsidiary of UK merchant bank Close Brothers Group, announced it is launching its FTSE4Good UK fund that will track the FTSE4Good UK index.

The fund is an open-ended investment company that will be open to retail and institutional investors. Close also proposes to launch similar tracker funds for FTSE’s equivalent US, European and global SRI indices.