MSCI ESG Universal Indexes
The new MSCI ESG Universal Indexes are a modern way of indexing, and are designed to address the needs of asset owners (who also classify themselves as universal owners), who may look to enhance their exposure to ESG while maintaining a broad and diversified universe to invest in.
By re-weighting free-float market cap weights based upon certain ESG metrics tilting away from free-float market cap weights, the indexes enhance exposure to those companies that demonstrate both a higher MSCI ESG Rating and a positive ESG trend, while maintaining a broad and diversified investment universe.
The MSCI ESG Universal Indexes exclude only companies found to be in violation of international norms (for example, facing very severe controversies related to human rights, labour rights or the environment) and companies involved in controversial weapons (landmines, cluster munitions, depleted uranium, and biological and chemical weapons).
The MSCI ESG Universal Indexes is the latest in a suite of MSCI Indexes and tools designed to help institutional investors globally integrate ESG into their investment decision-making processes.
Several Global Asset Owners have selected MSCI ESG Indexes, with over $180 billion allocated in recent years11 Based on publically available information in press releases published from 2014 to date.
The indexes can be used to support:
- Asset allocation: Consistent, complete representation that captures the full spectrum of the global equity opportunity set without home bias.
- Performance measurement and attribution: An industry-leading benchmark suite for global mandates, with regional, country, sector and other subsets available for more targeted investment mandates.
- Research: A trusted source for global equity markets and underlying security-level data for sell-side research.
- Investment product development: May be licensed for use as the basis for structured products and other index-linked investment vehicles, such as ETFs and ETNs.