Stoxx Expands ESG Index Suite

By Dieter Holger

Stoxx Ltd., the index provider of Deutsche Boerse AG (DB1.XE), has expanded its suite of environmental, social and governance benchmarks with 42 new indexes, including a version of the bellwether Euro Stoxx 50 Index.

The new indexes are part of the German stock-market company's ESG-X series, which screens out weapons, tobacco, thermal coal as well as companies which violate the United Nations Global Compact principles on human and labor rights, the environment, ethics and anti-corruption, Stoxx said Wednesday. The indexer partnered with ESG data provider Sustainalytics to assist with the screening.

Benchmarks target global and emerging markets, including versions of the Stoxx Global 3000, Stoxx Global 1800 and Stoxx Emerging Markets 800.

Stoxx said it also created an ESG-X version of the Stoxx USA 500 in response to clients demanding a European exclusion strategy aimed at the U.S. market.

Indexers are stepping up their ESG offerings as asset managers have rapidly deployed sustainable funds to meet consumer demand for feel-good investing. There were 219 exchange-traded funds world-wide with some sort of ESG mandate in 2018 compared with 62 in 2013, according to financial intelligence firm Morningstar.

"In order to meet ESG investment criteria, asset owners need to look for solutions beyond the traditional market-cap-weighted index, and still create portfolios that do not diverge from standard benchmarks or incur additional costs," Inderpal Gujral, head of product at Stoxx, said.

Stoxx is also looking to Europe's nascent ESG derivatives and futures market. Earlier this month, Goldman Sachs Group Inc. (GS) listed at least six sustainable finance products--including derivatives--on the Euronext Amsterdam stock exchange as the first leveraged products linked to Stoxx 's ESG indexes.

Write to Dieter Holger at [e-mail]; @dieterholger

(END) Dow Jones Newswires

May 29, 2019 09:54 ET (13:54 GMT)

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