Impact Investing

S&P is rolling out socially-minded index

Key Points
  • S&P Dow Jones Indices will launch an environmental, social and governance version of its S&P 500 Index.
  • The move's an effort to meet increased investor demand for sustainable-investment vehicles based on U.S. equities.
  • A global family of ESG indices based on the firm's other widely tracked regional and country-specific large and mid-cap benchmarks will also be introduced.
krisanapong detraphiphat | Moment | Getty Images

S&P Dow Jones Indices, a unit of S&P Global Inc., is launching an environmental, social and governance version of its in an effort to meet increased investor demand for impact-investment products based on U.S. equities.

In the coming months, S&P DJI will also launch a global family of ESG indices based on its other widely tracked regional and country-specific large and mid-cap benchmarks used in the Americas; Europe, the Middle East and Africa (EMEA); and the Asia-Pacific (APAC) region.

More from Impact Investing:
Impact investors battle Trump's anti-climate stance
This app fights climate change, makes you money
Investing with equal pay in mind tougher than you'd think

The S&P 500 ESG Index (ticker: SPXESUP) will replicate the risk and return of the S&P 500 — the market-cap-weighted index of the 500-largest publicly traded companies in the U.S. — while integrating environmental, social and governance criteria, according to company officials.

The index will target 75% of the traditional S&P 500's market capitalization at the industry level based on the Global Industry Classification Standard.

"We are excited to bring to market these innovative ESG indices and scores," said Alex Matturri, CEO at S&P Dow Jones Indices. "Our philosophy as an independent index provider is to offer choice to investors.

Sign Up for Our Newsletter Your Wealth

Weekly advice on managing your money
Get this delivered to your inbox, and more info about about our products and services.
By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.

"We will continue to contribute to the growth of sustainable finance and economies through our indices."

The new index will exclude tobacco producers, makers of certain weapons and companies with a low score in relation to the United Nations Global Compact principles for responsible businesses. S&P will use data from ESG ratings providers Sustainalytics and Arabesque to screen out ineligible companies.

S&P DJI said the new S&P 500 ESG Index will serve as a performance-tracking tool and a building block for new ESG index-based investment vehicles and passive investing solutions, such as ETFs.

VIDEO1:2701:27
Socially responsible investing