S&P Dow Jones Indices (S&P DJI) announced today that it is launching sustainability screened versions of its flagship indices, including the S&P 500, the S&P MidCap 400, and the S&P SmallCap 600. The new indices aim to measure the performance of stocks involved in business activities that avoid controversies and are aligned with ESG investors’ values. In conjunction with the launch, BlackRock announced that it would introduce new iShares ETFs based on the new indices.
Dan Draper, CEO of S&P Dow Jones Indices, said:
“S&P Dow Jones Indices is proud to be at the forefront of cutting-edge ESG indexing and benchmarking. As a pioneer in this space for more than two decades, we create independent, transparent and trusted ESG indices that enable investors to support more sustainable economies.”
According to S&P DJI, stocks in the new indices apply exclusion screens based on certain criteria, filtering out companies involved in thermal coal extraction and power generation, oil sands extraction, and energy exploration and production as well as those that are involved in controversial weapons, small arms, and tobacco.
Additionally, the index provider stated that BlackRock’s iShares has selected and licensed S&P DJI’s Sustainability Screened Indices to deliver sustainable investing alternatives for its exchange-traded funds in the U.S.
Carolyn Weinberg, iShares Global Head of Product at BlackRock, said:
“We are excited to launch iShares ETFs with these newly created sustainability screened versions of S&P’s flagship indices. These flagship indices are core portfolio building blocks and the new screened versions will provide more choices for sustainable investing. We welcome adding a new suite with S&P’s global brand and ESG capabilities to iShares sustainable platform.”
Reid Steadman, Global Head of ESG Indices at S&P Dow Jones Indices, said:
“Since the successful global launch of S&P DJI’s core ESG index series in 2019, we continue to see growing investor appetite for tailored ESG versions of our most popular market-cap weighted indices using more targeted screening approaches. This new index series enables investors to gain a broad exposure to the U.S. stock market while staying consistent with their sustainability values and goals.”