October 23, 2018 / 11:12 AM / MSCI
• MSCI’s first off-the-shelf index methodology to incorporate a range of ESG exclusions in broad market capitalization indexes
MSCI Inc. (NYSE: MSCI), a leading provider of indexes and portfolio construction and risk management tools and services for global investors, launches the MSCI ESG Screened Indexes, a suite of indexes incorporating a range of ESG exclusions.
The MSCI ESG Screened Indexes aim to exclude companies associated with thermal coal, oil sands extraction and those deriving revenues from controversial and nuclear weapons, civilian firearms, and tobacco. Companies violating the United Nations Global Compact principles will also be excluded.
These new MSCI indexes aim to represent the performance of a free float adjusted market capitalization weighted opportunity set with common ESG exclusions. These indexes are designed to be used as a policy, performance benchmark and serve as the basis of investment products such as exchange traded funds (ETFs).
“Making exclusions with a market capitalization approach has been possible for many years and MSCI has done so for over two decades. We have observed a growing interest amongst institutional and wealth investors for market capitalization indexes with ESG exclusions as an off-the-shelf solution, ones that are easy to use and implement,” comments, Deborah Yang, Global Head of ESG Indexes.
“This launch underpins MSCI’s commitment to monitor the evolving ESG landscape and to provide innovative indexes that are designed to help investors address their needs as trends develop.”
The initial suite of six indexes is available as a standard offering for easier access and implementation and includes:
• MSCI EMU ESG Screened Index
• MSCI USA ESG Screened Index
• MSCI Europe ESG Screened Index
• MSCI World ESG Screened Index
• MSCI Japan ESG Screened Index
• MSCI Emerging Markets IMI ESG Screened Index
MSCI has over 20 years of experience in building customized ESG exclusion based indexes for some of the world’s most prominent pension funds and endowments. Globally, over $108 billion in assets are benchmarked to MSCI ESG Indexes.