MSCI is to consult with the investment community on the possibility of developing global socially responsible indices.
Any new development would build on the 23 environmental, social and governance (ESG) indices that are the continuation of the KLD indices that MSCI acquired as part of its $1.55bn acquisition of RiskMetrics last year.
“The proposed indices aim to support the benchmarking and other index related needs of investors who seek to invest in accordance with their values such as religious beliefs, moral standards or
ethical views,” MSCI said in a statement.
“The proposed indices will exclude companies that are inconsistent with specific values based criteria and will target companies with high ESG ratings relative to their sector peers.” The announcement would appear toindicate that MSCI is considering competing with the established ESG index series such as FTSE4Good and the Dow Jones Sustainability Indexes, launched in 2001 and 1999 respectively. And it also reflects how “mainstream” socially responsible investing has become.
MSCI firm said it would welcome feedback from the investment community – and that it plans to contact market participants directly to solicit feedback.
“In particular, MSCI will seek feedback on the objectives as well as the design of the proposed MSCI Global Socially Responsible Indices.”
The New York-based company, a recent signatory to the United Nations Principles for Responsible Investment, will announce its final decision by March 4, though it stressed that the consultation process “may or may not” lead to the creation of any new indices.