Record growth in ESG assets

Green energyMSCI, a leading provider of exchange-traded funds indices, has reported record revenue growth in its environmental, social and governance (ESG) research and indexing division. MSCI’s ESG business, already the world’s largest by both indices and linked assets under management, grew revenues by 33% over 2015 to $38 million (€34.3 million). The firm believe this development is symptomatic of the emerging importance of factors such as ethics, society, faith and the environment for investors, alongside traditional financial objectives. Earlier this month, it announced the expansion of its ESG fund metrics offering to include coverage of 21,000 mutual funds and exchange-traded funds (ETFs). The metrics evaluate ESG factors of all holdings within an ETF, and assign an overall rating for the fund based on the weighted-average characteristics of its constituents. Eric Moen, managing director of MSCI ESG Research, said controversies such as the Volkswagen scandal have served as a “wakeup call” for investors, who may have previously overlooked ESG factors. MSCI ESG now serves 47 of the top 50 asset managers by assets under management. Notable clients include Allianz, BMO, Legal & General, M&G, Merrill Lynch, Morgan Stanley, PIMCO and RBC. ©2016 funds europe

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