Index and data provider MSCI has launched a series of environmental, social and governance (ESG) indices for pension funds and other long-term asset owners.
The ESG indices are intended to help asset owners focus on ESG issues in their decision-making, by increasing their exposure to strong ESG performers while also remaining broadly invested in the market. The MSCI ESG Universal Index moves away from a free float market cap weighting, with a strategic tilt to companies with a positive ESG profile. The index limits exclusions to companies which are in clear violation of international norms on human rights, or involved in controversial weapons, such as landmines, cluster munitions or biological or chemical weapons.
MSCI global head of index, Diana Tidd, commented: “The MSCI ESG Universal Indexes offer the world’s largest asset owners a scalable way to integrate ESG into their investment decision-making processes. Asset owners can use the MSCI ESG Universal Indexes to facilitate asset allocation or to help implement investment strategies in accordance with their ESG goals.”