Last year alone, according to the Zug Institute of Financial Services, the number of sustainable mutual funds approved for distribution in Switzerland jumped from 595 to 777 and their combined assets under management increased from CHF 198 billion to CHF 316 billion. There accordingly is a great need for universal guidelines regarding ESG criteria. With the new ESG indices from SIX we aim to establish solid, independent benchmarks for the Swiss bond and equity market.
We use data from Inrate, an independent Swiss sustainability rating agency, to calculate the indices. Inrate’s ESG impact ratings measure the positive and negative effects that individual issuers of debt and equity securities – companies, governments, institutions, and public entities – have on our environment and society.
Issuers with an ESG impact rating of C or lower and issuers that derive 5% or more of their revenue from adult entertainment, alcohol, defense, gambling, genetic engineering, nuclear energy, thermal coal, or tobacco are excluded from our ESG indices. The indices likewise rule out issuers that generate revenue from oil sands extraction or which appear on the exclusion list published by the Swiss Association for Responsible Investments.
The new bond and equity indices from SIX enable investors to focus on issuers that act and operate sustainably according to Inrate. The Swiss Bond Index (SBI) gets a sustainable counterpart with the SBI ESG. The Swiss Performance Index (SPI) forms the basis for the SPI ESG and SPI ESG Weighted, which close the sustainability gap in the Swiss equity market.