The STOXX Benchmark ESG-X Indices are designed to align with responsible investment policies, utilizing standardized ESG exclusion screens applied to established STOXX Benchmark Indices. These indices aim to mitigate risks associated with companies involved in activities deemed controversial or unsustainable.
Specifically, STOXX excludes companies identified by ISS ESG as non-compliant with norms-based screening, those involved in controversial weapons or tobacco production, and companies with significant revenue streams from thermal coal extraction or thermal coal-based power generation.
These ESG-X Indices serve as robust underlyings for a variety of financial instruments, including mandates, passive funds, ETFs, structured products, and listed derivatives. The design focuses on enhancing liquidity and reducing trading costs for investors seeking ESG-aligned options.
In a significant step for sustainable investing in the US market, the STOXX® USA 500 ESG-X Index became the basis for the first listed derivative on US equities incorporating thermal coal exclusions in February 2020. This future is traded on Eurex, marking an expansion of ESG-focused investment tools.
These indices adhere to ESMA guidelines for fund names using ESG or sustainability-related terminology. This includes screening for controversial weapons, tobacco, coal (above a 1% revenue threshold), oil fuels (above 10%), gaseous fuels (above 50% for power generation), and compliance with UNGC principles and OECD guidelines. Meeting the ESMA threshold, these indices ensure that over 80% of investments contribute to environmental or social characteristics or sustainable investment objectives, aligning with the binding elements of their investment strategy.
Detailed index guides, benchmark statements, and further reports are readily accessible under the Data tab for those seeking in-depth information.
