BP evicted from ethical index, delays Q3 results

LONDON/BOSTON Fri Sep 10, 2010 3:22pm EDT

A logo is seen at a BP fuel station in London July 27, 2010. REUTERS/Toby Melville

A logo is seen at a BP fuel station in London July 27, 2010.

Credit: Reuters/Toby Melville

Related Video

LONDON/BOSTON (Reuters) - BP Plc will be evicted from the FTSE4Good ethical investment index following its Gulf of Mexico oil spill, index compiler FTSE said on Friday, as BP said it would delay its third-quarter results due to the challenges of accounting for spill costs.

FTSE said BP would be dropped from FTSE4Good, which many managers of ethical funds use to screen companies before including them in their portfolios, from September 18, citing a FTSE policy committee.

"The Committee's decision to remove BP followed consideration of the company's response to the Gulf of Mexico oil spill, the environmental and social impact and its history of similar incidents," FTSE said in a statement.

BP was evicted earlier this year from the DJ Sustainability Index. Ethical investors account for an increasing portion of share buyers and, consequently, the decisions could hit demand for BP shares in future.

In an interview, FTSE's director of responsible investment, David Harris, declined to give much more detail about the reasoning of the oversight committee.

Generally, companies are reviewed after major accidents or problems, with consideration given to their track records, he said.

"In the case of BP, the committee felt BP did not have an exemplary record and its response to the incident was not exemplary either," Harris said.

The shares of BP, which declined immediate comment, closed down 0.9 percent at 411.65 pence, lagging a 0.4 percent drop in the STOXX Europe 600 Oil and Gas index.

BP said earlier it would delay the release of its third-quarter results by a week because of added accounting complexities related to the Gulf of Mexico oil spill, the worst in United States history.

The company said its quarterly figures, normally reported on the last Tuesday of the month after the end of a calendar quarter, would now be released on November 2, rather than October 26.

A spokesman said the decision came after it proved challenging to complete its previous quarterly numbers within the normal timeline and denied it was related to the discovery of any new liabilities.

BP released on Wednesday an internal investigation into the explosion on the Deepwater Horizon drilling rig on April 20. The spokesman said the team compiling the report, which laid most of the blame on the companies BP hired to drill the well, had been supported by internal and external lawyers.

But he said the lawyers had been "ring-fenced" from the rest of BP and denied their role was to frame the report -- much criticized by the contractors and U.S. politicians -- so as to help BP fend off lawsuits.

"Their role was to make sure everything in the report was legally watertight," spokesman Andrew Gowers said.

(Reporting by Tom Bergin and Ross Kerber; editing by David Cowell, David Holmes and Andre Grenon)

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (1)
1AmericanGuy wrote:
The FTSE4Good sounds like a scam, because SERIOUSLY, how could ANY petrolium company EVER make it on a list of ethical companies? That’s laughable.

Sep 11, 2010 6:09am EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

Photo

California's historic drought

With reservoirs at record lows, California is in the midst of the worst drought in decades.  Slideshow