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S&P Dow Jones Indices Launches New Global Family of ESG Indices and an ESG Score

In May 2019, S&P Dow Jones Indices expanded its Core ESG offering with the launch of a global family of ESG indices based on the new S&P Dow Jones Indices’ ESG scores. The new global family includes the new S&P 500® ESG Index,  as well as other widely tracked regional and country-specific large and mid-cap benchmarks used in the Americas; Europe, Middle East and Africa (EMEA); and Asia-Pacific.  

 

ESG indices will serve a diverse array of clients’ needs

Core ESG Indices
Climate Indices
Thematic ESG Indices
Fixed Income ESG Indices

Expanding Core ESG
S&P 500® ESG Index

Integrating Environmental, Social and Governance Values into the Core 
The objectives of the S&P 500 ESG index are to provide a similar risk/return profile to the S&P 500 and to avoid companies that are not managing their businesses in line with ESG principles.

How the S&P 500 ESG Index is built:

Start with the S&P 500 constituents and exclude those associated with: Tobacco Controversial weapons Non-compliance with UN Global Compact (UNGC) ESG scores in the bottom 25% of their global GICS ® industry peer group Sort the remaining eligible constituents within each GICS ® industry peer group by their ESG scores Starting with the highest ranking ESG Scores, select constituents and target 75% of benchmark market capitalization within each industry group. Next, weight constituents by float-adjusted market capitalization. The remaining constituents are excluded from the index S&P 500 Constituents Excluded from Index Included in Index Eligible & Ranked by ESG Score Ineligible 1 2 3 BostonBuenos AiresDenverHightstownNew YorkPittsburghWashington D.C.São Paulo DubaiMoscowStavanger BeijingHong KongMelbourneShanghaiTokyo
Introduced in April 2019:
S&P Dow Jones Indices’ ESG Scores
The S&P Dow Jones Indices’ ESG Scores were launched in April 2019. The ESG Scoresare derived using the data gathered by SAM, a division of RobecoSAM. 
SAM’s Corporate Sustainability Assessment (CSA) is an annual evaluation of companies’ sustainability practices, covering a wide range of industry-specific ESG criteria. The data for the scores comes directly from companies responding to one of SAM’s 61 industry-specific questionnaires, or from publicly-disclosed company information that is analyzed by SAM’s analysts.

How ESG Scores are built:

esg-scores-a-2 6001,000 Data Points 80120 Question Scores 1627 Criteria Scores ESG Scores E | S | G Dimension Scores S&P Dow Jones Indices ESG Scores are available to the market as a standalone product and can be used as a tool for a broad range of research, indexing, and investment purposes. Start with company responses to the CSA survey, which provide a granular set of data points Responses are scored based on company performance and validation of responses Question scores are aggregated into criteria scores Criteria scores are aggregated into environmental, social, and governance dimension scores based on each criteria’s financial materiality Total ESG Scores are calculated by aggregating dimension scores 1 2 3 4 5

S&P Dow Jones Indices pioneered ESG indexing more than 20 years ago with the 1999 launch of the Dow Jones Sustainability World Index, the first global sustainability benchmark