Swiss Financial Service SIX launches new ESG indices.

Photo: Leaprate

SIX, the financial services company that operates the infrastructure for the Swiss financial centre has recently announced the launch of new ESG indices in the Swiss equity and bond markets. These indices cover the sustainability criteria of environment, social/society and governance.

ESG criteria provide information on how companies factor in environmental and social considerations, as well as their approach to working towards sustainable corporate governance. There has been an increased demand for sustainable investments that take ESG criteria into account. Therefore, SIX has worked to draw on data sources such as Inrate to measure the positive and negative impacts of companies on the environment and society. Inrate is an independent Swiss sustainability rating agency.

Christoph Müller, CEO of Inrate, said:

"Investors integrate ESG into their investments in order to incorporate general concerns and values of society and to expand the data basis for investment decisions. This requires a high degree of comparability, systematics and, if possible, quantification. Inrate wants to take the leading role in this."

Having drawn data from Inrate, SIX has now announced its offering of two SPI ESG indices for equities and 20 new SBI ESG indices available for bonds, all based on the Swiss Performance Index. For a company to fall within the indices, it must have an ESG Impact Rating of a minimum of a C+, generating no more than 5% of its revenue in a critical sector, and cannot appear in the exclusion list of the Swiss Association for Responsible Investments. Critical sectors include adult entertainment, alcohol, armaments, gambling, genetic engineering, nuclear energy, coal, oil sands and tobacco.

The trading industry is becoming increasingly aware that it must always keep up with geopolitical and technological disruption along with client demand in order to withhold its relevance. That means that focus is turning progressively more to ESG products.

Marion Leslie, Head Financial Information and member of SIX Executive Board, said:

"We are creating new opportunities for investors to target their investments with sustainable criteria. This is in line with our strategy to consistently evolve our data offering to provide solutions for future market needs."

Reprinted from Leaprate, the copyright all reserved by the original author.