FTSE Russell plans more sustainable investment indices amid growing demand from ESG minded investors

London-based global index provider FTSE Russell aims to launch more sustainable investing index solutions to help investors align their portfolios with personal values and investment goals, amid growing demand for such products, particularly among asset managers in the Asia-Pacific region.

A FTSE Russell’s global survey of 350 asset owners, conducted in March-April this year, showed that 80 per cent of respondents were evaluating and implementing sustainable investment strategies or strategies which leverage environmental, social and governance (ESG) objectives, themes, and related considerations as a primary means for selecting investments. This percentage was even higher in the Asia-Pacific region at 90 per cent of the 109 asset owners surveyed.

“We’re hoping [to] provide the right index solutions that investors can use,” said Yan Yan, head of index research and design in APAC at FTSE Russell, speaking at a media round table on Wednesday. “Such products will allow them to not only have a lower carbon footprint when they measure their portfolios but also enable them to engage as a shareholder with the companies they hold to have a true impact for a Paris-aligned, 1.5 degrees target.”

He was referring to the Paris Agreement goals to limit global temperature increases to 1.5 degrees Celsius.

FTSE has developed index solutions such as the green revenue data model, which allows users to identify and quantify a company’s revenue exposure to green business activities, and to measure its progress in achieving green standards.

Green business contributed 7.2 per cent of the total revenue and the product covered the 15,000 listed companies that made up FTSE Russell’s investment universe as of December.