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Setting the standard in ESG Indexing

MSCI ESG indexes are designed to represent the most prevalent environmental, social and governance (ESG) investment strategies, utilizing our award-winning ESG data and ratings on thousands of companies worldwide. Institutional investors interested in sustainable investing can use these industry-leading indexes to benchmark ESG investment performance, issue index-based ESG investment products, and manage and report on ESG mandate compliance.
 


MSCI ESG Index Families

MSCI Global Sustainability Indexes: These benchmarks target the highest ESG-rated companies making up 50% of the adjusted market capitalization in each sector of the underlying index. The indexes are designed for investors seeking exposure to companies with strong sustainability profiles with relatively low tracking error to the underlying equity market and are reconstituted annually. The family includes the MSCI ACWI ESG Index, MSCI World ESG Index and MSCI EM ESG Index.

MSCI Global SRI Indexes: These benchmarks consist of companies with the highest ESG ratings making up 25% of the adjusted market capitalization in each sector of a parent MSCI index, after excluding companies involved in alcohol, tobacco, gambling, civilian firearms, military weapons, nuclear power, adult entertainment and genetically modified organisms (GMOs). In addition to MSCI ACWI SRI Index, MSCI World SRI Index and MSCI EM SRI Index, region and country sub-indexes are available. The family also includes the MSCI KLD 400 Social Index, which was launched in May 1990 and is one of the first SRI indexes.

MSCI Global ex Controversial Weapons Indexes: These benchmarks are designed for investors who wish to avoid investments in cluster bombs, land mines, chemical and biological weapons, and depleted uranium weapons. The selection universe for the MSCI Global ex Controversial Weapons Indexes is defined by the constituents of MSCI AWCI. In addition to MSCI ACWI ex Controversial Weapons Index, MSCI World ex Controversial Weapons Index, and MSCI EM ex Controversial Weapons Index, region and country sub-indexes are available.

MSCI Global Environmental Indexes: The MSCI ESG Environmental Index family provides Low Carbon, Fossil Fuels Exclusion and Thematic indexes for investors. Increasingly, institutional investors may need to consider how climate change may present risks and opportunities and how to manage carbon exposure in their portfolios. These indexes are designed to support various low carbon investment strategies and include the MSCI Low Carbon Indexes, MSCI Global Fossil Fuels Exclusion Indexes, and the MSCI Thematic Indexes, such as the MSCI Global Climate Index.

Barclays MSCI ESG Fixed Income Indices: The Barclays MSCI ESG Fixed Income Indices comprise more than 500 standard and bespoke ESG fixed income indices representing the most widely used ESG strategies and investment objectives. The family includes the Barclays MSCI Green Bond, Socially Responsible, Sustainability, and ESG Weighted Indices.

MSCI ACWI Sustainable Impact Index: This index is comprised exclusively of companies whose core business addresses at least one of the world’s social and environmental challenges, as defined by the United Nations Sustainable Development Goals. The Sustainable Impact categories include: nutritious food, treatment of major diseases, sanitary products, education, affordable housing, loans to small and medium size enterprises, alternative energy, energy efficiency, green building, sustainable water, and pollution prevention. To be eligible for inclusion in the Index, companies must generate at least 50% of their sales from one or more of the Sustainable Impact categories and maintain minimum environmental, social and governance (ESG) standards. The parent index is MSCI ACWI.

Custom MSCI ESG Indexes: Calculated using ESG criteria specified by clients and applied across developed and/or emerging markets countries or regions.

MSCI ESG Focus Indexes: The indexes are designed to target companies with positive environmental, social and governance (ESG) factors while closely representing the risk and return characteristics of the underlying market. Each index is constructed through an optimization process that aims to maximize its exposure to ESG factors, subject to a target tracking error and other constraints. The indexes are sector-diversified and are designed to over-weight companies with high ESG ratings and under-weight companies with low ratings. Tobacco and Controversial Weapons companies are not eligible for inclusion.

Applications

MSCI ESG indexes can be used for:

  • Asset allocation. Seamlessly integrates ESG standards and restrictions into portfolio strategies.
  • Performance measurement and attribution. Highly diverse set of benchmarks to accommodate a broad spectrum of sustainable investing mandates.
  • Research. A trusted source for ESG benchmark and underlying security-level data for sell-side research.
  • Investment product development. Serves as a popular basis for ESG-driven structured products and other index-linked investment vehicles, such as ETFs and ETNs.

ESG Index Factsheet search

Want to learn more about MSCI ESG indexes?

ESG INTEGRATION

The world is changing. With it, the world of investing is changing.

Research paper

2016 ESG Trends to Watch: Opportunities and Risks
Linda‐Eling Lee, Global Head of ESG Research

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