FTSE signs sustainability index venture with US provider KLD

KLD’s index suite to be jointly branded with UK group.

FTSE, the London-based index provider, has signed a deal with KLD Research & Analytics, the Boston-based US sustainability index group, under which the two groups will co-brand KLD’s suite of ESG benchmarks.
The groups said the joint venture means KLD will continue to carry out the research for its ten US indices and seven global indices, while the index calculations and marketing will be carried out by FTSE. They said the partnership was a straight joint venture with no extra financial terms. KLD, which started in 1988, is one of the most established providers of ESG benchmarks in the US. The group says that more than $10bn (€8bn) is invested in vehicles including mutual funds and exchange traded funds based on its indices, which include the Domini 400 Social Index, the first US benchmark constructed using environmental, social and governance (ESG) factors. FTSE runs its own sustainability index, FTSE4Good, out of London with research provided by Eiris, the UK ESG research company. It recently launched FTSE4Good Australia following 2004’s creation of FTSE4Good Japan.The new partnership, which does not involve FTSE4Good, will enable FTSE to build a separate sustainability index presence in the US and give KLD index further reach beyond its US base. Tom Kuh, managing director of KLD Indexes, said the revenue sharing partnership would also lead to the production of new customised sustainability indices. Jerry Moskowitz, president of FTSE Americas, said: KLD has an unparalleled reputation for excellence in ESG research and indexes. This partnership demonstrates FTSE’s commitment to expand its responsible investment offering for investors.” KLD also runs a series of indices in partnership with Jantzi Research in Canada. Earlier this year, FTSE also launched the Environmental Opportunities All-Share Index, made up of over 450 companies in the alternative energy, water and waste management sectors, with research by Impax, the specialist environmental fund manager. The two also work together on the FTSE ET50 index of pure-play clean tech companies.