MSCI ESG Indices
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With 40 years of expertise in index construction and maintenance, MSCI aims to set new standards for ESG indices - allowing clients to more effectively benchmark ESG investment performance, issue index-based ESG investment products, as well as to manage, measure and report on their compliance with ESG mandates. |
The MSCI ESG indices are grouped into the following main categories:
MSCI ESG ‘Best-in-Class’ Indices
MSCI ESG ‘Best-in-Class’ Indices represent the performance of the investment opportunity set (‘ESG beta’) of companies with high ESG ratings relative to their sector peers. They cover both global developed and the US markets. The indices target the highest ESG-rated companies making up 50% of the adjusted market capitalization in each sector of the underlying index, subject to the limitation that only companies with an ESG rating of ‘B’ or above are eligible for inclusion. They are reconstituted annually at the May Quarterly Index Review and rebalanced at the August, November and February Quarterly Index Reviews.
MSCI ESG Socially Responsible Indices
MSCI ESG Socially Responsible Indices represent the performance of the investment opportunity set of socially responsible companies with high ESG ratings. They avoid investments in companies involved in certain industries, such as tobacco, nuclear power or GMOs.
MSCI ESG Ex Controversial Weapons Indices
MSCI ESG Ex Controversial Weapons Indices represent the performance of the investment opportunity set of companies that comply with global norms of corporate behavior. The indices exclude a limited number of companies that violate these norms, such as producers of controversial weapons or companies involved in serious human rights abuses.
MSCI ESG ‘Environmental’ Indices
MSCI ESG ‘Environmental’ Indices represent the performance of the investment opportunity set of companies that reflect specific environmental themes, such as renewable energy or clean technology. They include developed and emerging market, large, mid and small cap companies that derive 50% or more of their revenues from products and services in one of five environmental themes: alternative energy, clean technology, sustainable water, green building and pollution prevention.
Custom MSCI ESG Indices
Custom MSCI ESG Indices are calculated using ESG criteria specified by clients and applied across Developed and/or Emerging Markets countries or regions. Custom MSCI ESG Indices integrate ESG analysis into the index construction process. An example is the MSCI Human Rights Custom Index on MSCI ACWI.
