S&P Dow Jones Indices Launches ESG Version of the S&P 500 Equal Weight Index PRNewswire
Impact Investing Forum 2022
London. Dec 07-08, 2022.
NEW YORK, Nov. 17, 2021 /PRNewswire/ — S&P Dow Jones Indices, the world’s leading index provider, has announced the launch of the S&P 500 Equal Weight ESG Leaders Select Index. Based on the equal weighted version of the iconic S&P 500(R), the new benchmark bridges the benefits of equal weight indices with a significant improvement in ESG performance from the parent S&P 500 Equal Weight Index.
“The launch of the S&P 500 Equal Weight ESG Leaders Select Index reflects the continued evolution of ESG investing by combining a smart beta factor – equal weight – into an ESG benchmark,” said Margaret Dorn, Senior Director, Head of ESG Indices, North America, S&P Dow Jones Indices. “S&P DJI continues to expand its family of ESG benchmarks with a goal of further encouraging the adoption of sustainable business practices across all industries.”
Beginning with the S&P 500 Equal Weight Index as the eligibility universe, the new ESG index excludes companies involved in specific business activities, companies with disqualifying United Nations’ Global Compact (UNGC) scores, companies with ESG controversies, and companies with S&P DJI ESG scores in the bottom 25% of each global GICS Industry Group.
The remaining eligible companies in each GICS Industry Group with the highest S&P DJI ESG scores are then selected for the index until as close to 40% of the constituent count from each Industry Group is reached. The result is an index that retains the equal weight benefits that factor-minded investors desire, but with an overall improvement in ESG score and a reduction in carbon intensity at the index level.
Quantifying the ESG Impact
Compared to the S&P 500 Equal Weight Index, the S&P 500 Equal Weight ESG Leaders Select Index has a wide range of measurable ESG impacts. For example:
23% higher exposure to companies that report quantifiable environmental indicators.
13% higher exposure to companies with targets and initiatives to reduce emissions.
21% higher exposure to companies that monitor and disclose female representation across their organization.
20% higher exposure to companies with publicly available anti-corruption policies.
S&P DJI has also entered into a license agreement with Invesco Capital Management to launch a US-listed ETF today tracking the S&P 500 Equal Weight ESG Leaders Select Index.
“Invesco is excited to continue its long partnership with S&P Dow Jones Indices, licensing the new ESG version of its equal weighting the S&P 500 Index to bring investors another choice in how they want to access the benefits of equal weight investing,” said John Feyerer, Head of Innovation and Commercialization, ETFs & Indexed Strategies, Invesco.
The S&P 500 Equal Weight ESG Leaders Select Index’s full methodology and fact sheet can be downloaded at www.spglobal.com/spdji.
ABOUT S&P DOW JONES INDICES
S&P Dow Jones Indices is the largest global resource for essential index-based concepts, data and research, and home to iconic financial market indicators, such as the S&P 500(R) and the Dow Jones Industrial Average(R). More assets are invested in products based on our indices than products based on indices from any other provider in the world. Since Charles Dow invented the first index in 1884, S&P DJI has been innovating and developing indices across the spectrum of asset classes helping to define the way investors measure and trade the markets.
S&P Dow Jones Indices is a division of S&P Global (NYSE: SPGI), which provides essential intelligence for individuals, companies, and governments to make decisions with confidence. For more information, visit: www.spglobal.com/spdji.
The S&P 500(R) Index, the S&P 500 Equal Weight Index, and the S&P 500 Equal Weight ESG Leaders Select Index (the “S&P Indices”) are products of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”), and have been licensed for use by Invesco Ltd. S&P(R) and S&P 500(R) are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones(R) is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Invesco Ltd. The Invesco S&P Equal Weight ETF and the Invesco ESG S&P 500 Equal Weight ETF are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product nor do they have any liability for any errors, omissions, or interruptions of the S&P Indices.
SOURCE S&P Dow Jones Indices