Stockholm (NordSIP) – On 4 October, Northern Trust Asset Management (NTAM) announced the launch of two new best-in-class ESG index funds, to track the MSCI ESG Leaders Indices. One of the funds will be focused on emerging markets and the second will cover the world’s developed markets. These will be the first European funds tracking the MSCI ESG Leaders Indices; until now, the only funds tracking these indices were available to US investors only.
The MSCI World ESG Leaders Index consists of best-in-class large and mid-cap companies in 23 developed market countries. The MSCI Emerging Markets ESG Leaders Index consists of best-in-class large and mid-cap companies across 24 emerging markets countries. Both indices provide exposure to companies with high ESG ratings relative to their sector peers.
“The companies in these funds are at the forefront of meeting ESG criteria in their particular universe, asset class or category,” said Mamadou-Abou Sarr, global head of ESG investing at NTAM, in the press release. “Companies are screened on a number of factors from involvement in controversial weapons, alcohol or tobacco and then rated according to their adherence to ESG principles – such as human rights, rights of employees, consideration for recycling and renewable energy, and independent constitution of boards.”
This launch underscores Northern Trust’s commitment to providing concrete ESG solutions to institutions whose needs in this field seem to be growing faster than ever. “We see an increasing interest from passive investors in Europe to take their ESG investing a step further with best-in-class solutions and we believe these funds offer a compelling solution,” commented Hazel McNeilage, managing director for NTAM in Europe, Middle East and Africa. Currently, out of its total AUM of USD1 trillion, NTAM manages USD65.9billion specifically related to its ESG screened strategies
To contribute to this growing interest in ESG strategies and to help investors in their journey towards more sustainable portfolios, NordSIP will be hosting a round table on 24 October where NTAM’s Sarr and other industry experts will share perspectives on how to best implement ESG in an institutional portfolio, including views on how to approach impact strategies. We will of course be reporting on the key points and advice shortly after the event.
Pictures (c) – Charan Rattanasupphasiri – Shutterstock, Northern Trust Asset Management