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S&P-Dow Jones index merger creates ESG benchmark powerhouse

Index titans seal merger agreement

The announcement that the Standard & Poor’s and Dow Jones index businesses will be combined means the creation of a new global powerhouse offering environmental, social and governance (ESG) benchmarks.

McGraw-Hill’s S&P index arm will be combined with the Dow Jones Indexes business that is 90% owned by the CME commodities exchange group, the companies said in a statement today.

The headline will be that the deal brings together the Dow Jones Industrial Average and the S&P 500 index into the same joint venture company to be called S&P/Dow Jones Indices.
But both businesses offer a string of ESG indices.

Dow Jones Indexes produces not only broad market sustainability indices like the Dow Jones Sustainability World Index.
It also offers a suite of blue-chip benchmarks like the Dow Jones Sustainability World 80 Index. Then there isa set of screened indices which exclude alcohol, tobacco, gambling and weapons. Dow Jones’ Sustainability Indexes are produced in collaboration with Swiss-based sustainability boutique SAM. In addition Dow Jones also offers a series of Islamic market indexes.

For its part S&P offers a range of carbon and ESG indices such as the S&P U.S. Carbon Efficient. There’s also Shariah compliant indices like the S&P Global BMI Shariah. On the thematic investing side S&P offers ‘green investing’ and natural resources (farmland and agribusiness). McGraw-Hill Chief Executive Terry McGraw said on a conference call with investors today that the deal offers “terrific synergies”.

Alexander Matturri, executive managing director of S&P Indices, will be CEO of the new venture. Lou Eccleston, president of McGraw-Hill Financial, will be chairman. Joint announcement