MSCI has bolstered capabilities with the launch of ESG Screened indexes, a suite of indexes incorporating a range of ESG exclusions.
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 indexes aim to represent the performance of a free float adjusted market capitalisation weighted opportunity set with common ESG exclusions. They are designed to be used as a policy, performance benchmark and serve as the basis of investment products such as exchange traded funds (ETFs).
Deborah Yang, Global Head of ESG Indexes said: “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.”