FTSE Russell has launched the Russell US ESG Indexes.
FTSE says six new indexes have been constructed using ESG screening criteria with risk and return characteristics that match the underlying benchmarks. Based on FTSE Russell’s US equity benchmarks, the Russell 1000, Russell 2000 and Russell 3000 indexes, the new index series contains two sub-groups: the Russell ESG Screened Target Exposure Indexes and the Russell ESG Enhanced Target Exposure Indexes.
The ESG Screened versions are for investors who want to remove harmful products or controversial activities and still maintain broad US market exposure. The ESG profile of the underlying index is improved by eliminating exposure to companies involved in the following business operations: Controversial Weapons, Firearms, Tobacco and Fossil Fuels. In addition, companies with the highest ESG controversies are excluded.
The ESG Enhanced versions are designed for investors seeking ESG score enhancement alongside the risk and return characteristics of the underlying benchmark. These indexes not only remove exposure to the same set of controversial business operations as the screened versions, but also incorporate sustainability issues by targeting specific ESG score improvement versus the benchmark. The ESG Enhanced indexes use Refinitiv ESG scores, an innovative framework that measures a company’s ESG performance, commitment and effectiveness relative to its industry peers.
The new range of indexes include:
• Russell 1000 ESG Enhanced Target Exposure Index
• Russell 2000 ESG Enhanced Target Exposure Index
• Russell 3000 ESG Enhanced Target Exposure Index
• Russell 1000 ESG Screened Target Exposure Index
• Russell 2000 ESG Screened Target Exposure Index
• Russell 3000 ESG Screened Target Exposure Index