STOXX Launches ESG Version Of Flagship Index
STOXX Ltd., the operator of Deutsche Boerse Group’s index business and a global provider of innovative and tradable index concepts, has launched an ESG version of its flagship index EURO STOXX 50®. The index was licensed to UBS Asset Management as an underlying for an ETF, which was listed in Frankfurt.
The new #EUROSTOXX 50 ESG Index is designed as a benchmark for investors seeking to integrate #ESG values as a core part of their portfolio. Today, @UBS launched the first #ETF based on this index. https://t.co/U1IKxTdm5c pic.twitter.com/baIaMVyObq
— STOXX Ltd. (@stoxx) August 6, 2019
Clemens Reuter, Head of ETF & Passive Investment Specialists, UBS Asset Management, said: “The demand for sustainable investments is accelerating, and the EURO STOXX 50 ESG helps us expand into new markets and segments, widening ESG investment opportunities. At UBS Asset Management, we seek to be a leader and innovator in sustainability-focused ETFs and recently launched an ETF on the EURO STOXX 50 ESG index, taking advantage of the new index and offering clients one more option that meets their SI needs whilst diversifying across industries and markets.”
“The ESG-version of our iconic blue-chip index EURO STOXX 50 is another innovative addition to our comprehensive ESG and sustainability suite. It is a highly liquid solution for asset owners who are looking for cost-effective ways to integrate sustainable factors in the core of their investments. The new index is suitable for mandates for pension funds, insurance companies, ETFs, passive funds, and structured products,” said Willem Keogh, STOXX Head of ESG, Thematic and Factor Solutions.
The EURO STOXX 50 ESG Index excludes ten percent of the least sustainable companies based on ESG scores. It applies a norm-based screening that follows the United Nations Global Compact principles of human and labor rights, the environment, business ethics and anti-corruption. Furthermore, it applies a product-based screening for controversial weapons, tobacco, thermal coal extraction and coal-powered energy production. Every excluded company is replaced by the largest non-controversial company in the same ICB supersector with a higher ESG score.
Data from leading ESG data provider Sustainalytics is used for ESG scores, norm-based and product-based screening. The new index improves the ESG profile of the EURO STOXX 50 Index while keeping a similar risk and return profile.
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