S&P Dow Jones Indices (S&P DJI) has launched a global environmental, social and governance (ESG) index series. The indices follow eligibility criteria on companies’ business activity, ESG scores, and the UN Global Compact.
Companies that produce tobacco, have tobacco sales and tobacco-related products and services greater than 10% of their revenue are excluded.
“Across the company, we are developing a portfolio of products that provide an ESG lens on investments, adding layers of insights for clients,” said Alex Matturi, chief executive of S&P DJI.
“These new indices provide market participants with an investment tool that is aligned with their values and has a return profile that’s consistent with mainstream benchmarks that have been widely followed for years.”
Companies involved in “controversial weapons” either directly or via a stake ownership of 25% and above are also excluded, as well as firms that are not aligned with UN global compact scores.
“The end result is an ESG index version whose risk and return profile is closely in line with that of its regional or country parent notwithstanding the various exclusions the methodology requires,” according to S&P DJI.
The scores are overseen by the firm’s governance group, and calculated by SAM, a branch of RobecoSAM that specialises in producing ESG data.
“While ESG has long been of great interest to investors, market participants are becoming increasingly sophisticated in integrating ESG factors into their investments,” said Reid Steadman, S&P DJI’s Global Head of ESG Indices.
“Through our collaboration with SAM, we’ve developed an enhanced ESG scoring methodology that is purposely built for integration in our indices.”
A total of 22 regional and country indices are included in the launch:
- S&P/ASX 200 ESG
- S&P Europe 350 ESG
- S&P Japan 500 ESG
- S&P Global 1200 ESG
- S&P United States LargeMidCap ESG
- S&P Canada LargeMidCap ESG
- S&P Korea LargeMidCap ESG
- S&P North America LargeMidCap ESG
- S&P Europe Developed LargeMidCap ESG
- S&P Mid-East and Africa Developed LargeMidCap ESG
- S&P Asia Pacific Developed LargeMidCap ESG
- S&P Developed LargeMidCap ESG
- S&P Europe Emerging LargeMidCap ESG
- S&P Latin America Emerging LargeMidCap ESG
- S&P Mid-East and Africa Emerging LargeMidCap ESG
- S&P Asia Pacific Emerging Large MidCap ESG
- S&P Emerging LargeMidCap ESG
- S&P Global LargeMidCap ESG
- S&P Asia Pacific Developed ex Korea ESG
- S&P Asia Pacific Emerging Plus LargeMidCap ESG
- S&P Developed BMI ex Korea LargeMidCap ESG
- S&P Emerging Plus LargeMidCap ESG
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