Index provider S&P Dow Jones Indices (S&P DJI) announced today the launch of the S&P 500 SDG Index and the S&P Global LargeMidCap SDG Index, aimed at offering investors broad-based equity performance measurements and exposure to companies more aligned with the UN Sustainable Development Goals (SDGs).
The UN SDGs refer to the 17 categories of goals adopted in 2015 as part of the 2030 Agenda for Sustainable Development, with the aim to protect the planet and improve the quality of life globally. SDG targets include ending poverty and hunger, improving education, and protecting the environment.
The new S&P 500 SDG and the S&P Global LargeMidCap SDG indices aim to measure the performance of eligible equity securities from S&P DJI’s flagship S&P 500 and S&P Global Large MidCap indices, respectively, with securities selected and weighted to enhance alignment to the SDGs, as well as to reduce carbon footprint at the index level.
From a performance benchmarking perspective, the indices leverage data to measure and reflect specific external impact that companies’ products and activities are making on society and the environment, regardless of the financial materiality implications. S&P DJI said that it licensed Corporate SDG alignment data from ESG impact data and portfolio solutions provider Impact Cubed, which uses a granular revenue and operations mapping approach, focused on a company’s products, and on how those products are made, as well as where the goods and services are sold and engagement with communities and stakeholders to determine company SDG alignment and net impact.
Jas Duhra, Global Head of Sustainability Indices at S&P DJI, said:
“With this approach, S&P DJI is offering broad-based sustainability performance measurement tools, one that is based on the S&P 500, which is the best single gauge of large-cap U.S. equities, and the other based on the S&P Global Large MidCap Index, which represents the top 85% market capitalization of each developed and emerging country.”