Important note: Information in this article was accurate in 2002. The state of the art may have changed since the publication date.
BBC News - Friday, 4 October, 2002
The index will be modelled on London's FTSE4Good index launched last year.
The Johannesburg Stock Exchange (JSE) has set out criteria that firms wishing to join the index must meet but will not finalise them until it has received feedback from companies and activists.
The index will not be actively traded, but will act as guide to investors.
Tackling apartheid legacy
To be included, firms must show a good record on human rights, environmental protection and stakeholder relationships, JSE director Nicky Newton King told the BBC's World Business Report.
The South African index will also put an emphasis on measures needed to redress the economic inequalities created by white minority rule during the apartheid era.
It will do so by judging member companies on their commitment to buy raw materials locally and to pursue affirmative action and economic empowerment practices, Ms Newton King said.
Firms must also show "an understanding of the prevalence and impact on the company of HIV/Aids and have taken appropriate action in that regard", Ms Newton King said.
Taking HIV seriously
About 11% of South Africans are thought to be infected with the virus that causes Aids, a figure which has raised fears about the economic impact of the illness.
Some large firms, including mining house Anglo-American, have begun to offer their staff free treatment.
South Africa's economy and stock market is dominated by mining firms, a sector which has often been the target of criticism from environmentalists.
The JSE wants to hear from interested parties whether the ethical index should be limited to firms that meet all the criteria or only some of them, Ms Newton King said.
Tighter rules would be more likely to exclude mining firms.
Best buy?
South Africa's government is trying to finalise a package of controversial new laws to increase black ownership of the mining industry.
The JSE is also consulting on whether tobacco firms and those linked to the nuclear industry should be excluded altogether.
Investors in ethical stocks may have to settle for a lower return on their money.
The ethical FTSE4Good index slumped 30% in its first 12 months, to July 2002, whereas the main blue-chip FTSE 100 lost 28% of its value in the same time period.
Johannesburg played host in August to the World Development Summit on sustainable development and poverty alleviation.
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