ICB: FTSE Russel Industry Classification Benchmark

Industry Classification Benchmark is a hierarchical four-level system that classifies companies based on their main source of revenue. It is operated and managed by FTSE Russell, a subsidiary of London Stock Exchange Group (LSEG). It is currently one of the major classification systems for securities. This system has been in use since its release in 2005. It is globally recognized and used by some of the biggest financial institutions, such as: London Stock Exchange, NYSE Euronext and NASDAQ.

Metadata

Publisher type Commercial
Publisher(s)
Jurisdictions Global

Available versions

  1. Industry Classification Benchmark (ICB) 2019 V.2 (Current)
  2. Industry Classification Benchmark (ICB) 2019 V.1 (Legacy)
  3. Industry Classification Benchmark (ICB) 2007 (Legacy)
  4. Industry Classification Benchmark (ICB) 2005 (Legacy)

Industry Classification Benchmark, otherwise known as ICB is a system that allows categorization and comparison of companies by their industry and sector. It is operated and managed by FTSE Russell, a wholly owned subsidiary of London Stock Exchange Group (LSEG). The system currently provides the definition of 173 subsectors. Companies (and securities in general) are then assigned to a subsector based on their source of revenue or the majority of it. The revenue source is determined by “audited accounts and directors' report”.

ICB is an alternative to The Global Industry Classification Standard (GICS) developed by MSCI and Standard & Poor's. Both of them are globally recognized four-tier classification systems created to provide uniform identifications for different industries. Both ICB and GICS categorize companies based on their revenue sources. However, in the case of GICS “earnings and market perception" are also recognized as important and relevant information for classification purposes and are considered during the annual review process.

History

The history of ICB classification dates back to 1962, when the initial version of the classification was developed for FT Actuaries All-Share Index (currently known as FTSE All-Share® Index). That original classification structure was later reviewed in 1970 and 1994. In 1999 FTSE launched FTSE Global Classification System (GCS), a 3-tier industry classification system with 10 “Economic Groups”, 36 “Industry Sectors”, and 102 “Industry Subsectors”.

In 2014 FTSE acquired Russell, with plans to integrate the Russell Global Sectors (RGS) classification with ICB. RGS was a 3-tier, hierarchical classification system with 9 Sectors, 33 Subsectors and 157 Industries. The integration goal was accomplished in 2019, when FTSE Russell launched a new, enhanced version of the Industry Classification Benchmark.

Versions

Industry Classification Benchmark (ICB) 2019 V.2 (Current)

ICB 2019 V.2 has been in effect since July 1, 2019.

Changes Between ICB 2019 V.1 and ICB 2019 V.2

ICB 2019 V.2 added two new subsectors: 20103020 - Cannabis Producers and 50205015 - Transaction Processing Services. In the Financials Industry, some codes were renamed such as 30204000 from "Equity Investment Instruments" to "Closed End Investments"; 30205000 from "Nonequity Investment Instruments" to "Open End and Miscellaneous Investment Vehicles". While the above codes were renamed without changed to their definitions, code 50205020 was renamed from "Back Office Support, HR & Consulting" to "Professional Business Support Services" while its definition was updated to include more specific activities.

Structure of ICB V.2019

ICB V.2019 provides four levels of classification, as follows:

  • Industry: 11 Industries identified by a 2-digit code.

  • Supersector: 20 supersectors identified by a 4-digit code.

  • Sector: 45 sectors identified by a 6-digit code.

  • Subsector: 173 subsectors identified by an 8-digit code.

The classification is hierarchical, in that each 8-digit subsector belongs to a 6-digit sector, each sector belongs to a 4-digit supersector, and each supersector belongs to a 2-digit industry. (For example, 45101020 - Soft Drinks is a subsector of 451010 - Beverages, which is a sector of 4510 - Food, Beverage and Tobacco that is a Supersector of 45 Consumer Staples Industry). The table below shows the industries of the Industry Classification Benchmark and how many supersectors, sectors and subsectors they consist of.

Industry Code

Description

# of supersectors

# of sectors

# of subsectors

10

Technology

1

2

8

15

Telecommunications

1

2

3

20

Health Care

1

3

10

30

Financials

3

8

17

35

Real Estate

1

2

13

40

Consumer Discretionary

5

8

39

45

Consumer Staples

2

4

13

50

Industrials

2

7

38

55

Basic Materials

2

4

17

60

Energy

1

2

9

65

Utilities

1

3

6

Total

20

45

173

Resources

Industry Classification Benchmark (ICB) 2019 V.1 (Legacy)

ICB 2019 V.1 was in effect from January 2019 to July 2019.

Changes Between ICB 2007 and ICB 2019 V.1

ICB 2019 V.1 created a new Industry for Real Estate which was previously under the Financials Industry. The Telecommunications Industry was broadened to incorporate Telecommunications Equipment (previously in the Technology Industry) and Cable Television Services (previously in the Media Sector). Other Industry-level changes included the renaming of the Oil and Gas Industry to Energy and the adoption of a new Consumer Discretionary and Consumer Staples Industry framework. Parts of the Consumer Goods Industry in ICB 2007 were moved to the new Consumer Staples Industry, while parts of the Consumer Services Industry were moved to the new Consumer Discretionary Industry. Moreover, the fine detail of the system was substantially expanded with the creation of 57 new subsectors and the coding system was changed from the 4-digit format to the format detailed below.

Structure of ICB 2019 V.1

ICB 2019 V.1 provides four levels of classification, as follows:

  • Industry: 11 Industries identified by a 2-digit code.

  • Supersector: 20 supersectors identified by a 4-digit code.

  • Sector: 45 sectors identified by a 6-digit code.

  • Subsector: 171 subsectors identified by an 8-digit code.

Resources

Industry Classification Benchmark (ICB) 2007 (Legacy)

ICB 2007 was in effect from March 2008 to January 2019.

Changes Between ICB 2005 and ICB 2007

Notable changes included the movement of Real Estate in the hierarchy from the sector level in ICB 2005 to the supersector level in ICB 2007 under which seven new subsectors were created providing more detail for Real Estate Investment Trusts (REITs). The emergence of alternative power sources was also recognized with the inclusion of an alternative energy sector.

Structure of ICB 2007

ICB 2007 provides four levels of classification, as follows:

  • Industry: 10 Industries identified by a 4-digit code.

  • Supersector: 19 supersectors identified by a 4-digit code.

  • Sector: 41 sectors identified by a 4-digit code.

  • Subsector: 114 subsectors identified by a 4-digit code.

Resources

Industry Classification Benchmark (ICB) 2005 (Legacy)

ICB was launched in 2005 by FTSE and Dow Jones, two of the world’s most leading index providers at the time. In 2011 Dow Jones divested its interest in the ICB, and FTSE became the sole owner of the system.

Structure of ICB 2005

ICB 2007 provides four levels of classification, as follows:

  • Industry: 10 Industries identified by a 4-digit code.

  • Supersector: 18 supersectors identified by a 4-digit code.

  • Sector: 39 sectors identified by a 4-digit code.

  • Subsector: 104 subsectors identified by a 4-digit code.

Versions Prior to ICB 2005

The history of ICB classification dates back to 1962, when the initial version of the classification was developed for FT Actuaries All-Share Index (currently known as FTSE All-Share® Index). That original classification structure was later reviewed in 1970 and 1994. In 1999 FTSE launched FTSE Global Classification System (GCS), a 3-tier industry classification system with 10 “Economic Groups”, 36 “Industry Sectors”, and 102 “Industry Subsectors”.

Resources

Where is it used?

Other Further Resources

Other resources