ESG Investor’s weekly round-up of news on technology and tools in the sustainable investing sector.
Index provider S&P Dow Jones Indices (DJI) has announced the launch of the S&P ESG Equity Target Risk Index Series, consisting of three new indices tracking risk-return characteristics while incorporating ESG values. The S&P ESG Equity Series covers Moderate, Growth and Aggressive approaches. S&P DJI has also announced a licensing agreement with Taiwan Cooperative Securities Investment Trust, while will use both the Growth and Aggressive indices and the basis for its index funds. “These innovative ESG indices aim to give investors exposures to global equity and bond markets with enhanced ESG characteristics, while providing targeted risk levels according to their appetite and investment goals. Target risk indices are widely used to construct balanced funds with a desired risk and return outcomes. This targeted strategy is commonly used by investors to develop retirement solutions,” said Tianyin Cheng, Senior Director of Strategy Indices at S&P DJI.
The Singapore Exchange (SGX) has launched a suite of ESG derivatives under its SGX First sustainability agenda, which was first announced in December last year. The four new derivatives are the SGX FTSE Emerging ESG Index Future, SGX FTSE Emerging Asia ESG Index Futures, the SGX FTSE Asia ex Japan ESG Index Futures and the SGX FTSE Blossom Japan Index Futures. The indices are backed by major global pension funds and prompted by leading international standards. “Our leadership in developing a pan-Asia shelf of benchmark equity derivatives has placed us in a distinct position to drive the change the world needs to see today. Together with FTSE Russell’s strengths in investable multi-asset products and ESG, our offering of sustainable risk-management solutions in Asia is unrivalled,” said Michael Syn, Head of Equities at SGX.
CME Group, the Chicago-based derivatives exchange group, announced the launch of a Global Emissions Offset (GEO) futures contract on March 1, 2021, pending regulatory approval. The new contract, which will provide customers with a market-based solution to manage global emissions risk, was jointly developed with Xpansiv market CBL. “Demand for voluntary carbon offsets is growing around the world as more countries and companies take action toward creating a lower carbon economy,” said Peter Keavey, Global Head of Energy at CME Group. “GEO futures will provide a regulated, market-based solution that can help address risk management needs for near-term emissions reduction strategies, as well as a standardized pricing benchmark to help facilitate long-term climate goals.”
Financial data provider Refinitiv’s ESG Company Scores are now free to view on its website. The scores measure 10 main themes when evaluating a company’s relative ESG performance, including human rights, environmental product innovation and emissions targets. Users can now access Refinitiv’s database of publicly disclosed data and track the ESG footprint of more than 10,000 companies. “The ESG footprint of a company is no longer a niche consideration for investors or indeed wider stakeholders such as employees, regulators, consumers, policy makers and society at large,” said Leon Saunders Calvert, Head of Sustainable Investing at Lipper and I&A Insights, Refinitiv.
Climate-risk analytics company Entelligent has partnered with ethical investment firm Promethos Capital to better provide forward-looking climate data analysis. Promethos will employ Entelligent’s Smart Climate technology to bolster its range of ‘intentional investing’ products, focusing on gender equality-based and climate resilience strategies. “We’re excited to be partnering with Promethos Capital as they strengthen their offering of climate-aligned portfolios. Our Smart Climate technology will play a vital role in ensuring that these strategies are resilient to the growing risks presented by climate change and consistent with a net-zero future,” said Thomas Stoner, CEO at Entelligent.
The Global Property Research (GPR) and the Global Listed Infrastructure Organisation (GLIO) have launched the GLIO/GRESB ESG Index, which will expand on the parent GLIO Index and use the GRESB’s annual infrastructure public disclosure scores to weight constituents. Companies must derive at least 75% of earnings from communications infrastructure, renewable energy and energy transportation and storage. The index will be managed by GPR. “The launch of the GLIO/GRESB ESG Index is a leap forward in the sophistication of the asset class, aimed at encouraging better ESG disclosure. We see this as a move towards better ESG engagement with companies, enabling investors to benchmark through an ESG lens,” said Manoj Patel, Chairman of the GLIO Index Committee.