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MSCI and IHS Markit set up ESG index partnership

ESGIndex provider MSCI is collaborating with analytics firm IHS Markit to broaden the reach of its environmental, social and governance (ESG) rating and research data.

MSCI’s ESG ratings will be applied in the range of fixed income and credit indices from IHS Markit.

Sophia Dancygier, head of indices at IHS Markit, said: “Investors have a growing appetite for exposure to ESG funds, creating a need for indices that integrate these principles while accurately representing the underlying market and continuing to deliver strong returns.”

As a first phase of the collaboration, IHS Markit has also launched sustainability-focused iBoxx MSCI short maturity corporate bond indices in three currencies – the euro, the dollar, and pound.

The index excludes issuers in business lines or activities defined by MSCI ESG business involvement screens.

MSCI ESG Research rates companies on an ‘AAA’ to ‘CCC’ scale according to their exposure to ESG risks, and how well those risks are managed.

To be included in the indices, issuers must have an MSCI ESG rating of BBB and above, as well as comply with the United Nations Global Compact principles.

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