Global Suite of ESG Indices Based on Other Core Country & Regional Benchmarks to Follow
NEW YORK, April 8, 2019 /PRNewswire/ -- S&P Dow Jones Indices ("S&P DJI"), the world's leading index provider, today announced the debut of the S&P 500® ESG Index, an innovative index that is aligned with Environmental, Social and Governance (ESG) selection guidelines and designed to closely replicate the risk and return profile of its most iconic benchmark.
As part of this maiden ESG index launch, S&P DJI is introducing the new S&P DJI ESG Scores, calculated by SAM, the unit of RobecoSAM, which specializes in providing ESG data, ratings, and benchmarking.
In the coming months, S&P DJI will also launch a global family of ESG indices based on its other widely tracked regional and country-specific large and mid-cap benchmarks used in the Americas, Europe, Middle East and Africa (EMEA) and Asia-Pacific (APAC).
"We are excited to bring to market these innovative ESG indices and scores. S&P Dow Jones Indices pioneered ESG indexing over 20 years ago with the 1999 launch of the Dow Jones Sustainability World Index, the first global sustainability benchmark. Our philosophy as an independent index provider is to offer choice to investors. We will continue to contribute to the growth of sustainable finance and economies through our indices," said Alex Matturri, Chief Executive Officer at S&P Dow Jones Indices.
ESG Index Innovation on the Iconic S&P 500®
The S&P 500® ESG Index takes from S&P DJI's most well-known benchmark and provides an ESG criteria selection overlay. The index is developed to serve not only as a performance tracking tool but as a building block to create new ESG index-based investment products and passive investing solutions such as exchange-traded funds (ETFs). S&P DJI expects to license the S&P 500® ESG Index and its upcoming global family of ESG indices to a range of financial services firms globally.
S&P DJI recently entered into a license agreement with UBS Asset Management in Europe for the S&P 500® ESG Index. UBS plans to launch a new ETF based on the index this week.
"UBS aims to be the world's leading sustainable financial provider by developing innovative products to meet the evolving needs of our clients. We are very pleased to have joined forces with S&P Dow Jones Indices and SAM to create a new generation of ETFs, built upon the most widely-tracked U.S. equity index, enabling clients to align their investments with their ESG goals," said Ulrich Koerner, President at UBS Asset Management.
"An increasing number of investors require indices that are aligned not only with their investment goals but also their individual and institutional values. The S&P 500® ESG Index is constructed with both of these needs in mind. Unlike many ESG indices that preceded it - which were more thematic or narrower in their focus - the S&P 500® ESG Index is broader and developed to target the core of an investor's portfolio," said Reid Steadman, Global Head of ESG Indices at S&P Dow Jones Indices.
The S&P 500® ESG Index targets 75% of the traditional S&P 500's market capitalization at the industry-level based on their Global Industry Classification Standard (GICS). The index offers diversification and a profile that is closely in line with that of the U.S. large-cap market. The companies included in the index are selected based on the S&P DJI ESG scoring methodology, powered by SAM.
Robust ESG Scores
S&P DJI collaborated with SAM to introduce an enhanced ESG scoring methodology designed for the new S&P 500® ESG Index and the upcoming country-specific and regional ESG indices. The scores are used as inputs to evaluate companies on the indices. The S&P DJI ESG Scores are available to the market as a standalone product and can be used as a tool for a broad range of research, indexing and investment purposes.
"Typically, investors simply eliminated companies from indices such as the S&P 500 if they wanted to include ESG criteria, which significantly alters their risk and return profiles. The S&P 500® ESG Index, using these granular ESG scores, presents an option for market participants who wish to integrate ESG factors into their investments while maintaining close alignment to the overall profile of the S&P 500," added S&P DJI's Mr. Steadman.
The research and methodology on the S&P 500® ESG Index and S&P DJI ESG Scores are available at: www.spdji.com.
ABOUT S&P DOW JONES INDICES
S&P Dow Jones Indices is the largest global resource for essential index-based concepts, data and research, and home to iconic financial market indicators, such as the S&P 500® and the Dow Jones Industrial Average®. More assets are invested in products based on our indices than products based on indices from any other provider in the world. Since Charles Dow invented the first index in 1884, S&P DJI has been innovating and developing indices across the spectrum of asset classes helping to define the way investors measure and trade the markets.
S&P Dow Jones Indices is a division of S&P Global (SPGI), which provides essential intelligence for individuals, companies, and governments to make decisions with confidence. For more information, visit www.spdji.com.