“A New ESG Index for Mexico Sets the Stage for Investment” – S&P Global – July 11, 2020

On July 11, 2020 S&P Global announced that the S&P/BMV Total Mexico ESG Index was launched on June 22, 2020.

“The S&P/BMV Total Mexico ESG Index is built with the same philosophy underpinning the creation of many popular new ESG indices around the world, such as the S&P 500 ESG Index. The idea is that certain ESG indices should be more inclusive than exclusive to remain broad and diversified, such that the ESG index has a risk/return profile resembling that of the market, while providing an improved ESG profile.

Exhibit 1 shows how this index is constructed. First, exclusions are made according to companies’ involvement in business activities related to tobacco or controversial weapons or low compliance with the United Nations Global Compact (UNGC). Next, the S&P DJI ESG Score is used to screen and select companies. Finally, companies are weighted by their ESG Score.

The result is an index that, at launch, retained 29 of the 56 companies in its benchmark index, the S&P/BMV Total Mexico Index. By maintaining more than half of the original number of constituents and selecting companies within their industries, the index remains relatively balanced from a sector perspective. Exhibit 2 shows the average sector exposure of the ESG index and the benchmark index from the time S&P DJI had enough ESG data to calculate this index.”

You may read the article on the S&P Global internet site.

“ASI eyes ESG with global emerging markets fund launch” – FT Adviser – July 10, 2020

On July 10, 2020 FT Adviser reported that “Aberdeen Standard Investments has added to its environmental, social and governance offering by launching a sustainable and responsible emerging markets portfolio.

ASI announced this week (July 7) it had launched the Emerging Markets Sustainable and Responsible Investment Equity fund in a bid to generate strong long-term performance for those seeking to improve ESG practices.

According to ASI, the fund’s holdings have a better ESG metric than sector peers and a lower carbon footprint than the index.

Managers will identify ‘high quality companies through a bottom-up assessment’ of the sustainability of their business models and ESG performance, and all holdings will be given an ESG score after ‘in-depth research.’

ASI said the launch was part of its ongoing strategy for sustainable development and the first of two responsible investment strategies launched by the emerging markets team this year.

Fiona Manning, investment director at ASI, said: ‘We have a long history in emerging markets investment and ESG considerations have been incorporated in our stock analysis and decision-making for over 25 years.

By analysing the foundations of the business and a thorough evaluation of the ESG risks and opportunities, we have identified companies which we believe to be sustainable leaders or improvers.’”

Registered subscribers can read the article on the FT Adviser internet site.