Industry Updates

Scientific Beta introduces ESG option for multifactor indices

George Geddes

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Scientific Beta, the smart beta index provider, has introduced the option of a low carbon filter for all its flagship multi-smart-factor indices.

The low carbon option filters out companies with high carbon emissions which reduces the indirect contribution to climate change of investments and encourages the transition to a low carbon economy.

Scientific Beta says offering the screener to investors enables them to reduce the risk of being caught out by this transition.

In May this year, Scientific Beta said a third of assets replicating its smart factor indices already apply an environmental, social and governance (ESG) filter following the launch of two low carbon indices.

In addition to excluding companies with high carbon intensity, the low carbon option excludes companies which fall short of global standards of responsible business conduct. This includes activities which conflict with global ESG norms.

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Frederic Ducoulombier, ESG director at Scientific Beta, commented: "The low carbon option is now a very important fiduciary choice for investors.”

“Scientific Beta's low carbon indices have financial risk/reward characteristics that are closely aligned with our standard smart factor indices through exposure to scientifically-validated risk premia and the reduction of specific, unrewarded risks.”

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