The FTSE ESG Risk-Adjusted Index Series family is designed to reflect the performance of benchmark indices with specific ESG risk adjustments compared to the underlying benchmark. This is achieved by taking into account ESG and climate data sets and excluding companies involved in specific activities.
The FTSE ESG Risk-Adjusted Index Series included the following indices:
- FTSE 100 ESG Risk-Adjusted Index
- FTSE 250 ESG Risk-Adjusted Index
- FTSE 350 ESG Risk-Adjusted Index
- FTSE All-Share ESG Risk-Adjusted Index
- FTSE MIB ESG Risk-Adjusted Index
- Russell 1000 ESG Risk-Adjusted Index
The indices are constructed to adjust for carbon risks and ESG performance. The indices target a reduction in fossil fuel reserve exposure, reduction in operational carbon emissions intensity and ESG score improvement on the index level at semi-annual rebalances, relative to the underlying Index.
The index excludes companies involved with controversial product activities, including controversial weapons, tobacco, thermal coal (extraction and energy generation), oil sands, shale energy and arctic exploration, and companies involved with controversial conduct related to the UN Global Compact Principles.
The indices can be used as performance benchmarks, or as the basis for index-linked products including index tracking funds, derivatives and Exchange Traded Funds (ETFs).
Featured indices
FTSE UK ESG Risk-Adjusted Index Series
The FTSE UK ESG Risk-Adjusted Index Series, based on the FTSE UK Index Series, is designed to reflect the performance of UK stocks, while improving broad ESG characteristics and maintaining similar risk/return characteristics to the underlying universe. The indices target a 50% reduction in fossil fuel reserve exposure, 50% reduction in operational carbon emissions intensity and 5% ESG score improvement on the index level at semi-annual rebalances, relative to the underlying Index.
FTSE MIB ESG Risk-Adjusted Index
The FTSE MIB ESG Risk-Adjusted Index, based on the FTSE MIB Index, is designed to reflect the performance of Italian stocks, whilst improving broad ESG characteristics and maintaining similar risk/return characteristics to the underlying universe.
The FTSE MIB Index is the primary benchmark index for the Italian equity market and represents the large cap component of the FTSE Italia All-Share Index.
The index is adjusted for ESG and Carbon Risks by tilting away from companies with exposure to fossil fuel reserves and away from companies with higher carbon emissions intensity. It also tilts towards companies with higher ESG scores.
Key resources
Why ESG Risk-Adjusted indices?
Investors are seeking the ability to incorporate sustainable investment considerations within a broad market portfolio without significantly impacting the risk and return characteristics of that industry standard benchmark.
Based on the well-known FTSE Benchmarks: FTSE 100, FTSE 250, FTSE 350, FTSE All-Share®, and FTSE MIB capturing the investable market capitalisation.
The ESG Risk-Adjusted indices incorporate broad ESG and carbon risks by targeting specific improvements and reductions versus the benchmark.
Target Exposure methodology ensures the index remains investible, managing risk/return characteristics vs the benchmark.
Video
FTSE UK ESG risk-adjusted index series
Discover how the FTSE UK ESG Risk-adjusted Index Series helps investors integrate broad ESG considerations into portfolios without considerably altering the risk return profiles associated with its benchmark.
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