Recent years have seen a marked rise in demand for sustainable investments that take ESG criteria into account. ESG criteria provide information on how companies factor in environmental and social aspects, as well as a sustainable approach to corporate governance. In developing its ESG indices, SIX has drawn on data sources including the independent Swiss sustainability rating agency Inrate. The ESG Impact Rating developed by Inrate measures the positive and negative impacts of companies on the environment and society.
SIX now offers two SPI ESG indices for equities based on the Swiss Performance Index (SPI). For bonds there are 20 new SBI ESG indices available, all based on the Swiss Bond Index (SBI). To be included in the indices, a company must have an ESG Impact Rating of at least a C+ and generate no more than five percent of its revenue in a critical sector. According to the index regulations, these critical sectors are adult entertainment, alcohol, armaments, gambling, genetic engineering, nuclear energy, coal, oil sands and tobacco. Index candidates also cannot appear in the exclusion list of the Swiss Association for Responsible Investments.
Marion Leslie, Head Financial Information and member of SIX Executive Board, highlights: "SIX is introducing ESG indices with broad coverage of Swiss equities and bonds for the first time. In doing so, 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."
Christoph Müller, CEO Inrate, comments: "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."
Further information on the new ESG indices from SIX, including their methodology, rules and composition, is available at www.six-group.com/esg-indices.