ESG Solutions: Indexing With Exclusions
While demand for ESG investing rises, asset owners grapple with the complexities of incorporating ESG parameters into their investment portfolios and asset managers are challenged by limits on accessible and consistent data. But since investor preferences and needs for ESG investments vary, so must the frameworks and capabilities that investment managers provide to accommodate these varied requirements. For example, investors have increasingly begun to question the validity of owning any Energy holdings, augmenting investment policies to entirely divest the sector. To address these needs, we constructed an ESG index solution that excludes Energy stocks yet can deliver improved performance, risk, and ESG metrics as compared to a standard market index.
