Solactive launches ESG index for best-in-class companies

Companies will be included if their sustainability credentials are among the best in their sector

Research and index group Solactive has launched a series of indices that track the companies with the most ambitious targets for environmental, social and governance matters.

The Solactive ISS ESG Prime Index Series includes global companies which achieve or exceed sector-specific performance requirements, as set out by engagement and proxy voting group ISS.

Companies included in the indices will be screened to ensure they are not involved in any environmental, societal or governance controversies. All businesses included are expected to operate in line with the United Nationals Global Compact standards.

In a statement on Monday (15 July), Solactive said that the new index series has been launched to appeal to asset managers looking for sustainable investment benchmarks. Solactive said the new series is available for licensing for exchange traded funds, structured products, benchmark purposes or customised index strategies.

Timo Pfeiffer, head of research at the German index group, said this latest launch follows the previously launched exclusion-based benchmarks earlier in the year.

He said: “We are now pleased to extend our range and offer clients yet another alternative in that space, this time focusing on the ‘best of the best’ in terms of overall ESG performance by combining exclusions with a rigorous, absolute best-in-class approach.”

The new index series will include benchmarks for global, emerging and developed markets, including the USA and Europe. Initially, the index will be limited to five regions. The methodology is based on the company’s Global Benchmark Series, customised extensions to the range are possible upon request.