Index firm STOXX launches global ESG indices with Sustainalytics data

New “fully transparent” offering mapped to KPIs for ESG 3.0

  • Methodology disclosed in new web portal
  • Advisory committee set up

STOXX Ltd., the index firm owned by Deutsche Boerse AG and Swiss exchange group SIX, has launched a new set of global environmental, social and governance (ESG) equity indices using data from research and analysis firm Sustainalytics.
STOXX said the Global ESG Leaders Index suite is mapped to the “KPIs for ESG 3.0” standard defined by the German Society of Investment Professionals (Deutsche Vereinigung für Finanzanalyse und Asset Management, or DVFA) and the European Federation of Financial Analysts Societies (EFFAS). It is fully approved by both organizations.
The series comprises three specialized indices for the environmental, social and governance categories and one broad summary index. These will be called the STOXX Global ESG Environmental Leaders, STOXX Global ESG Social Leaders, STOXX Global ESG Governance Leaders and STOXX Global ESG Leaders indices.“Our new index family will set standards in terms of full transparency and comprehensiveness in the ESG indexing space,” said STOXX’s chief executive Hartmut Graf. He added users will be able to look at detailed ESG ratings for each index component to make “an educated and conscious decision”.
The initial index universe is the STOXX Global 1800 Index. The ratings methodology is as follows:
First, companies involved in controversial weapons, tobacco or which are in breach of the UN Global Compact Principles are excluded from the index universe.
Secondly, a company must have a rating of at least 50 in the E, S and G categories to be eligible for inclusion. Finally, constituents for the specialized indices must have an E, S or G rating of at least 75 to be included in the respective specialized index.
STOXX claims the key innovation is that all ratings for the E, S, and G categories, as well as the methodology used to construct them, will be made public on STOXX’s website, as well as on a new portal on Deutsche Boerse’s website. In addition, an independent advisory committee has also been established.