LONDON/BERLIN (Reuters) - Index provider FTSE Russell has suspended carmaker Volkswagen (VOWG_p.DE) from its widely-followed FTSE4Good sustainable index series because of the German group's emissions manipulations.
The FTSE4Good index lists companies that meet certain environmental, social and governance (ESG) criteria. FTSE Russell says over 100 clients worldwide use its findings on these companies for their investment decisions.
Europe's largest automaker is battling the biggest business crisis in its 78-year history after admitting in September that it fitted as many as 11 million diesel models worldwide with illegal emissions-control software.
VW said last month it had also overstated fuel efficiency in about 800,000 cars mainly sold in Europe. Analysts have said the scandals could cost the company 40 billion euros ($43.57 billion) or more in fines, lawsuits and vehicle refits.
"The company is deemed to have misled government agencies and consumers over vehicle emissions through the application of software designed to circumvent test requirements," FTSE Russell said in a statement.
"The suspension follows an assessment of Volkswagen through FTSE's Controversy Monitor which considers the significance of crises or controversies; how the company has responded; and the extent to which it impacts wider industry," it said.
Subscribers to the FTSE4Good index include 50 institutional investors, a number of which rank among the world's largest asset managers, according to FTSE Russell.
The index provider said companies suspended are not eligible for reinclusion for at least two years. Suspension takes effect on Dec. 21, 2015.
VW has also had its credit ratings downgraded by agencies Moody's, Fitch and Standard & Poor's.
Almost three months after VW's cheating became public, the company is still trying to identify those responsible and organize vehicle refits. Its top executive and chairman are due to publish intermediate results of in-house investigations into the scandals on Thursday.
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Reporting by Carolyn Cohn in London, Andreas Cremer in Berlin and Noor Zainab Hussain in Bangalore; Editing by Tom Heneghan