Tesco, BHP-Billiton, Safeway, Royal Bank of Scotland, and BG Group are among the companies excluded from the controversial ethical index FTSE4Good, which was launched yesterday.
FTSE chief executive Mark Makepeace defended the anomalies in the FTSE4Good UK Index, which includes oil giants with tarnished environmental and human rights records, such as BP and Shell, but excludes their smaller rival BG Group.
He pointed to BG's failure to publish a human-rights policy while it invests in Egypt. In contrast, BP, which has a 5 per cent stake in Tibet-based Petrochina, has a published human-rights policy.
Royal Bank of Scotland was excluded because it invests in Indonesia without publishing a similar policy. Tesco and Safeway were both excluded because they do not publish environmental reports.
Newly merged and London-listed BHP Billiton was an unconditional exclusion because the company mines uranium. Billiton contributed a uranium mine in Arizona to the merged entity's mix of assets.
The index, which is designed to enable institutions and funds to invest in "socially responsible" companies, is to begin operating on July 31. Constituent companies were judged on their environmental, human rights and social policies.
Tobacco producers, weapons companies, nuclear power station operators and uranium miners were automatically shut out of the index.
Spokesmen for the excluded groups expressed surprise at their failure to make FTSE4Good's grade.
A BHP Billiton spokesman said the Smith Ranch uranium mine had a good environmental track record. The global miner is included in the Dow Jones Sustainability Index.
A Tesco spokesman said the group recycled 155,000 tonnes of card last year.
Safeway's spokesman descr ibed the compilers of FTSE4Good as having "seriously faulty eyesight" because the supermarket's environmental policy was on its website.
While one of the excluded companies described the new index as arbitrary, ethical investing has been attracting serious amounts of investment dollars. UK investors, in particular, are drawn to a growing range of ethically focused funds.
But the FTSE4Good came in for criticism from the CBI, which was concerned that excluded companies would be considered by the media and the public as "bad".
EIRIS, the consultancy that handled FTSE4Good's research, admitted that some companies might have been excluded because they had not chosen to publish certain policies or because they had failed to fill in a questionnaire.
FTSE's Mr Makepeace said: "This is not random at all. Clearly people have
moral agendas, but we are trying to get away from that."
Bank of Scotland: Invests in Indonesia; no published human rights policy.
Tesco: Does not publish an environmental report.
Anglo American: Mines uranium for nuclear power stations.
Rio Tinto: Mines uranium for nuclear power stations.
British American Tobacco: Tobacco is a "controversial" business.
BAE Systems: Makes defence weapons systems.
BG Group: Invests in Egypt; no published human rights policy.
Amvescap: No published details of stakeholder and social relations.
BHP Billiton: Mines uranium for nuclear power stations.
Reed International: No published details of stakeholder and social relations.
National Grid: Owns or operates nuclear power stations.
Marconi: Invests in Burma and China; no published human rights policy.
3i Group: Investment trusts are not included.
Reckitt Benckiser: Does not publish an environmental report.
Old Mutual: No published details of stakeholder and social relations.