Zurich UK has moved almost $1bn of its investment portfolio into a new ESG benchmark index.
Zurich UK says the MSCI USA ESG Universal Sector Neutral Select Capped Index delivers a 30% cut in carbon emissions of its constituents and enhanced ESG outcomes when compared to its parent index, the MSCI USA Index. The funds are managed by DWS.
The Index includes companies based on MSCI’s ESG metrics. The scores are combined with a company’s market capitalisation, allocating a higher index weighting to those companies with a good and improving ESG profile. The Index is ‘sector neutral’ meaning that high carbon emitting industries have the same overall weighting in the Index, but different allocations are made at the individual company level.
David Thompson, Zurich UK’s Chief Investment Officer, said: “Climate change is one of the most pressing issues of our time. By reducing the financed carbon emissions from our portfolio and continuing to engage with companies, we aim to play our part in financing a more sustainable future. Weighting our investments towards companies that score highly on ESG principles can deliver both superior risk-adjusted returns for customers and more sustainable outcomes.”