Sustainability equity indexes

Environmental, Social, and Governance (“ESG”) indices are no longer new. Some have been offered for over 30 years. In the last five years, ESG indices continued to mature to offer a new range of options that can be considered by institutional investors, particularly for indices that incorporate all E, S, and G considerations, and indices specifically addressing Environmental consideration.

This report reviews developments in the types of sustainability equity indices, categorizes these indices by their primary goals, describes the construction methodologies commonly used to build ESG indices, and provides key performance indicators (“KPIs”) for a sample of ESG indices. The report concentrates on the 51 ESG indices that were available from FTSE/Russell, MSCI and S&P Dow Jones Indices at the time of our analysis. Each provider also offers customized ESG indices. In addition to the ESG indices available from FTSE/Russell, MSCI, and S&P Dow Jones Indices reviewed here, other providers also offer ESG index products.