MSCI debuts new environmental index series

MSCI yesterday became the latest investment advisory firm to launch a series of environmental indices designed to help investors assess the performance of green firms.

The company said its new family of ESG (Environment and Social Governance) indices would provide investors with the ability to benchmark the performance of firms that qualify under environmental and social criteria, create new green investment products linked to the indices, and report on their compliance with ethical and sustainable investor requirements.

The 23 different new indices are divided by geography, technology, industrial sector and ethical values.

They fall into three broad categories: one that tracks the performance of " best-in-class" ESG firms, a second that looks at firms that qualify for ethical criteria, such as its new MSCI USA Catholic Values Index, and a final category that provides investors with information on specific sectors such as clean technology or alternative energy.

Remy Briand, Head of MSCI Index and ESG Research, said the indices had been developed in response to growing demand from green and ethical investors.

"MSCI's clients worldwide, especially those who are signatories to the United Nation’s Principles for Responsible Investing (UNPRI), are increasingly focused on ESG issues. ESG factors help assess externalities that can impact an entire portfolio," he said. "A growing number of asset managers are now subject to ESG-related mandates that will shape their strategies going forward."

MSCI is the latest in a series of analyst firms to introduce indices for tracking the performance of green and clean tech firms. Dow Jones, Ernst & Young, S&P, HSBC and Nasdaq have all launched various green and low carbon indices in recent years, to name but a few.