Stoxx has launched an ESG version of its flagship EURO STOXX 50 index. The index is used by UBS Asset Management as an underlying for an ETF, which was listed in Frankfurt on 6 August.
The EURO STOXX 50 ESG Index excludes ten percent of the least sustainable companies based on ESG scores. It applies a norm-based screening that follows the United Nations Global Compact principles of human and labor rights, the environment, business ethics and anti-corruption. Furthermore, it applies a product-based screening for controversial weapons, tobacco, thermal coal extraction and coal-powered energy production. Every excluded company is replaced by the largest non-controversial company in the same ICB supersector with a higher ESG score.
Data from leading ESG data provider Sustainalytics is used for ESG scores, norm-based and product-based screening. The new index improves the ESG profile of the EURO STOXX 50 Index while keeping a similar risk and return profile.