Solactive has partnered with ESG data provider ISS ESG for the launch of an index comprised of companies that meet the United Nation’s Sustainable Development Goals (SDG).

The Solactive ISS SDG Leaders index uses an initial population from the Solactive GBS Global Markets All Cap USD index which includes more than 11,000 stock from 23 developed and 26 emerging market countries.

The index excludes companies that are involved in controversial weapons or have been verified to have failed to respect established norms such as human or labour rights.

ISS ESG scores the remaining companies on their SDG impact rating which uses the UN’s SDGs as a benchmark value.

Each company is evaluated with regard to its business for each of the 17 SDG criteria. This means scoring is criteria between -10 and 10 and must have an overall SDG impact rating score greater than 5.0.

However, the company is also removed it scored negatively in any of the 17 scores.

Solactive sees fastest growth across index providers in 2019

Timo Pfeiffer (pictured), chief markets officer, commented: “From my point of view, the most pervasive impact of the UN’s SDGs is that they provided a common and tangible framework helping to generate global awareness around ESG and sustainability among both the broader public and financial professionals.”

“Making those principles investible incentivises those companies actively engaging with social responsibility while downgrading non-compliant companies, which is a beneficial effect.”

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