Investment
FTSE Russell expands ESG research

FTSE Russell formed a global ESG research partnership with Sustainalytics, as investors demand ESG integration within their strategies.

The partnership will allow the firm to develop a new set of ESG indexes, with Sustainalytics' ESG risk ratings research to inform the construction of the indices.

Set for release in early 2019, the first products in the partnership will be based on the Russell US indexes, providing investors with greater choice when it comes to integrating ESG into their strategies.

The Russell 1000, 2000 and 3000 indexes suitable as a base for investors implementing ESG considerations into their investment strategies will receive the treatment first.

Chief executive Mark Makepeace said FTSE Russell believes the new indexes will provide additional choice to the market.

"This is an exciting development for our clients as it will provide new tools and benchmarks," Makepeace said.

"FTSE Russell has been a leader in sustainable investment for nearly two decades and has been supporting the growing demand for ESG integration into passive strategies. The partnership with Sustainalytics enables us to provide a greater selection of options and choice to meet these ever growing client demands."

Sustainalytics chief executive Michael Jantzi said the partnership's initial focus would be on the Russell US indexes.

"We are delighted to partner with FTSE Russell to combine our leading ESG Risk Ratings with FTSE Russell global indexes," Jantzi said.

"The focus will initially be on the Russell US Indexes which has a leading position amongst institutional and retail investors and the partnership will provide valuable tools for ESG integration and product creation."

The partnership follows FTSE Russell launching green real estate indexes this week. The indexes will allow investors to integrate climate risk into listed real estate portfolios.

The FTSE EPRA Nareit Green Indexes will use sustainability performance as tilts, adjusting the weights of constituents in the developed index, which according to the firm will increase green certification by 63% and drop carbon emissions per dollar of revenue by 40%.

Read more: FTSE RussellRussell USESG RiskMark MakepeaceMichael JantziFTSE EPRA Nareit Green
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