Labour Readiness Index by Weighted Scores (Top 100)
This index evaluates the FTSE 100 based on their performance in key areas prioritised by the Labour Party, anticipating a potential upcoming government term. Each company is assessed on critical metrics such as the economy, housing, environment, and workers' rights, derived from their annual reports. These metrics are weighted according to the Labour Party's prioritisation of these issues. The weighted values are then aggregated to create an overall preparedness index, which serves as a measure to assess the readiness of British businesses for a potential Labour government.
Talking Points
1. Alignment with Labour’s Missions:
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Only 8% of companies are 'aligned' with Labour’s missions, while a majority, 55%, are 'somewhat aligned', and 37% are 'not aligned' at all.
2. Top Performer:
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HSBC stands out as the top performer, demonstrating strong commitments to education and skills development, workers' rights, and environmental sustainability and clean energy.
3. Sector Focus on Key Issues:
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Over 50% of companies are 'aligned' or 'somewhat aligned' with priorities 'Environmental Sustainability and Clean Energy' and 'Quality Education and Skills Development'.
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Conversely, there is a significant lack of alignment with Labour’s missions on 'Community Safety' (92% not aligned) and 'Child and Youth Support' (94% not aligned).
4. Sector-Specific Alignment:
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In the FTSE 100, the Energy sector includes 3 companies, Healthcare has 6, Technology 2, Telecoms 3, and Utilities 4. None of these sectors have organisations fully 'aligned' with Labour's missions.
5. Sector's 'Aligned' or Somewhat Aligned' Statistics:
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Basic Materials - 83%
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Consumer Discretionary - 73%
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Consumer Staples - 55%
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Energy - 33%
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Financials - 50%
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Health Care - 33%
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Industrials - 74%
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Real Estate - 75%
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Technology - 100%
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Telecoms - 100%
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Utilities - 25%
6. Challenges in the Financials Sector:
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The Financials sector shows the highest number of companies 'not aligned', totaling 10. This indicates significant challenges in meeting future Labour governments standards.
7. Comparison of Legacy vs. New Entrants:
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65% of legacy companies are 'aligned' or 'somewhat aligned' with Labour’s missions, compared to only 50% of new entrant companies.
Charts
Top 10 Companies Most Prepared for a Labour Government
Top 10 Companies Least Prepared for a Labour Government
Sectors Most Prepared for a Labour Government
HSBC Top Performer: A Deep Dive
Number of FTSE100 Companies 'Aligned', 'Somewhat aligned' and 'Not aligned' to Labour's Missions
Percentage of Companies ‘Aligned’, ‘Somewhat aligned’ or ' 'Not aligned' with Labour on Key Issues
Number of Companies Aligned to Labour Missions by Sector
Alignment Comparison: Legacy vs. New Entrant Companies
Springy Methodology
Evaluating FTSE 100 Companies' Readiness for a Potential Labour Government
Welcome to our methodology section where we outline how we developed the Labour Preparedness Index. This specialised tool measures the readiness of the top 100 companies listed on the FTSE 100 index for a potential shift to a Labour government in 2024. Our analysis aims to provide a clear insight into how well these leading companies align with Labour's key policy objectives.
Step 1
Analysing Labour Party Missions
Our process began with a thorough review of the Labour Party’s official full document on ‘Labour’s missions for Britain’, from which we extracted five principal missions, released in February 2023:
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Get Britain building again.
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Switch on Great British energy.
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Get the NHS back on its feet.
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Take back our streets.
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Break down barriers to opportunity.
We documented each mission along with its specific pledges, ensuring a comprehensive understanding of the Labour Party’s agenda.
Step 2
Defining Impact Categories for Businesses
To accurately assess corporate readiness, we identified nine critical impact categories for UK companies that align with the Labour Party’s missions:
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Economic Stability and Growth
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Housing and Infrastructure
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Innovation and Industry Leadership
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Environmental Sustainability and Clean Energy
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Health and Wellbeing
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Community Safety and Justice
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Quality Education and Skills Development
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Social Equity and Workers’ Rights
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Child and Youth Support
For each category, we modelled definitions focused on the expected actions and strategies businesses might employ to align with potential government policies.
Step 3
Creating the Assessment Model
With our categories established, we developed a robust assessment model that was integrated into our data analysis system. This model was designed to evaluate and quantify business readiness against each defined category.
Step 4
In-depth Corporate Analysis
We collected and analysed the latest annual reports from each FTSE 100 company. Our focus extended beyond financial performance to include governance, sustainability, and social responsibility elements, providing the basis for assessing preparedness for Labour’s policy directions.
Step 5
Calculating Preparedness Scores
Each company was evaluated using the same model, resulting in an alignment score for each category and an overall readiness score. These scores were then classified into preparedness levels.
Weighted scoring for the analysis
In order to accurately reflect the significance of each Labour Party mission and its potential impact under a Labour-led government, we employed a weighted scoring system within our Labour Readiness Index. This system assigns different weights to each mission based on its order of appearance in the Mission documentation.
LABOUR MISSION
1. Get Britain building again. (Economy) - WEIGHT 1
2. Switch on Great British energy. (Energy/ Green) WEIGHT 0.9
3. Get the NHS back on its feet. (Care) WEIGHT 0.8
4. Take back our streets. (Community) WEIGHT 0.7
5. Break down barriers to opportunity. (Opportunity) WEIGHT 0.6
Our Labour Readiness Index is essential for investors, policymakers, and the broader public to gauge how effectively the UK's leading companies might adapt to the policies of a potential Labour government.
To learn more about our findings, contact ali@springy.io.
About Springy
Gerry Griffin
Director/ Founder
If you work with FTSE100 companies and want deeper analysis, contact ali@springy.io