Solactive has released the Solactive L&G ESG Index Family, targeted at investors who wish to integrate environmental, social, and governance (ESG) factors into their investment strategy.
Timo Pfeiffer, head of research at Solactive.
The launch is the result of a collaboration between Solactive and Legal & General Investment Management (LGIM), which combines LGIM’s ESG scoring system with Solactive’s expertise in index development.
Timo Pfeiffer, head of research at Solactive, commented, “This is quite a big achievement for Solactive, as these launches help us fulfil our commitment to enlarge the range of ESG strategies available in the market. With increasing focus from investors and regulators alike, sustainability is becoming the rule, rather than the exception. We are very excited to team up with LGIM and bring to life the Solactive L&G ESG Index Family.”
The new indices complement Solactive’s existing ESG line-up and offer exposure to each region within the developed markets equity universe, including Asia-Pacific, Europe, Japan, North America, and the UK. On the fixed income side, the new indices provide coverage of the investment grade corporate bond market denominated in euros, US dollars or pound sterling.
Each index initially excludes companies operating in controversial industries, such as weapons, coal mining, and those that are perennial violators of the United Nations Global Compact Principles. Secondly, each index adopts a modified market cap weighting scheme, assigning more weight to companies with higher ESG scores provided by LGIM.
The equity indices are available in three different versions: price return, total return and net total return. These are published in sterling and readjusted semiannually. The Solactive L&G ESG Bond TR Index Series is rebalanced on a monthly basis.