Euronext has launched an index tracking Italian blue-chip companies demonstrating good environmental, social and governance (ESG) practices.
The MIB ESG index selects the top 40 Italian listed companies – out of a list of the 60 most liquid firms – based on their ESG criteria and economic performance.
The index will be run in partnership with Vigeo Eiris, an affiliate of Moody’s, which will perform the ESG assessments and engage with issuers on their ESG performance.
In addition, the index will exclude companies with involvement in coal, controversial weapons and tobacco, in line with the United Nation’s Global Compact Principles.
Banks make up the largest share of the index, accounting for 19.7% of the holdings, followed by automobiles and conventional electricity with a 15.6% and 12.8% allocation, respectively.
Interestingly, integrated oil and gas is the next largest sector with a weighting of 8.1%, made up entirely from its holding in energy company Eni.
The company has pledged total decarbonisation of its products by 2050 and recently started producing sustainable aviation fuel.
The index will be revised every quarter and integrate new EU regulations and ESG standards “as they emerge”, Euronext said.
Stéphane Boujnah, CEO of Euronext, said: “The index is a contribution to a growing demand for sustainable investment tools from both institutional and private investors, and the market as a whole.
“The index facilitates the adoption of mainstream ESG investment approaches by investors in Italy and Europe. The first MIB ESG index also demonstrates the strong involvement in the ESG transition among most of the largest Italian listed companies.”
It is Euronext’s second national ESG index following the launch of the CAC40 ESG index established in March.
This index is currently tracked by one ETF, the BNP Paribas Easy CAC 40 ESG UCITS ETF, while Amundi revealed plans to launch its version in August.