S&P Dow Jones Indices have announced new carbon efficient indices to serve as part of an ESG investment strategy.
The indices include the S&P Global ex-Japan LargeMidCap carbon efficient index, the S&P Global LargeMidCap Carbon Efficient Index and the S&P/JPX Carbon Efficient Index.
The last one uses TOPIX as the universe and is co-branded with the Japanese Exchange Group, a combination of the Tokyo stock exchange group and Osaka securities exchange.
The indices are designed to reduce exposure to high-carbon companies in a systematic way, while maintaining a risk/return profile similar to their benchmarks.
S&P Global president and chief executive Douglas Peterson said that the company wanted sustainable investing at the core of their strategy.
“Companies and institutional investors increasingly see ESG factors as fundamental to managing financial risk and performance,” he said.
Mr Peterson said S&P was commitment to advancing sustainability throughout the portfolio.
“We are steadfast in our commitment to advance a global sustainable economy through our ESG products and services including Trucost’s leading environmental data and analytics which underpin the ground-breaking environmental indices launched,” he said.
Already the Government Pension Investment Fund for Japan (GPIF) has selected two of the new indices to serve as the benchmark for its ESG strategy.
S&P Dow Jones Indices chief executive Alex Matturri said S&P Dow Jones was honoured to work with GPIF to raise market awareness for ESG.
“As the large pensions and institutional investors have become increasingly aware of the need to understand, measure, and manage the environmental impacts of their investments, S&P Dow Jones Indices’ ESG capabilities continue to fill the gaps and contribute to the growth of sustainable economies,” he said.