MSCI, the world’s largest provider of environmental, social and governance (ESG) indexes, announced the launch of new MSCI ESG Universal Indexes and the renaming of two MSCI ESG Index families. The MSCI ESG Universal Indexes are designed to enable pension funds, endowments and other asset owners to better focus on ESG issues in their investment decision-making processes.
The MSCI ESG Universal Indexes may be suitable for asset owners and other large Institutional investors who classify themselves as universal owners and seek to enhance their exposure to ESG while maintaining a broad and diversified universe of equities to invest in. To target high ESG performers, the MSCI ESG Universal Index moves away from a free float market cap weighting and tilts toward companies that demonstrate both a robust ESG profile and a positive ESG trend.3
With a focus on weighting companies rather than excluding them, the index aims to maintain a broad and diversified universe of equities. To minimize exclusions, the MSCI ESG Universal Indexes limit them to companies found to be in violation of international norms (for example, facing severe controversies related to human rights, labor rights or the environment) and those involved in controversial weapons (for example, landmines, cluster munitions, depleted uranium, and biological and chemical weapons).
“The MSCI ESG Universal Indexes offer the world’s largest asset owners a scalable way to integrate ESG into their investment decision-making processes,” said Diana Tidd, MSCI’s Global Head of Index. “Asset owners can use the MSCI ESG Universal Indexes to facilitate asset allocation or to help implement investment strategies in accordance with their ESG goals.”
With over 700 ESG Indexes, MSCI continues to be a leader in ESG indexing and research. In 2016, more than $56 billion in assets were benchmarked to MSCI ESG Indexes globally. MSCI is the number one index provider to equity ESG ETFs globally.
The MSCI ESG Universal Index family comprises five indexes:
MSCI ACWI ESG Universal Index
MSCI World ESG Universal Index
MSCI Europe ESG Universal Index
MSCI EM (Emerging Markets) ESG Universal Index
MSCI USA ESG Universal Index
MSCI’s ESG Indexes
MSCI’s ESG Indexes offer institutional investors a suite of equity indexes designed to support varied approaches to ESG investing. In addition to the launch of the MSCI ESG Universal Indexes, the existing MSCI ACWI ESG and MSCI ACWI SRI Indexes will be renamed this June as described in the table below. The newly named indexes will continue to provide institutional investors with transparency into ESG sustainability and values alignment, as well as the ability to compare holdings.
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