Index provider S&P Dow Jones Indices (S&P DJI) and the Santiago Exchange announced the launch of the S&P IPSA ESG Tilted Index, aiming to provide investors with core exposure to the Chilean equities market while providing a significant boost in ESG score performance.
The S&P IPSA ESG Tilted Index starts with all constituents in the S&P IPSA, Chile’s headline stock index, and applies exclusions for companies involved in controversial weapons, tobacco, thermal coal, as well as for companies with disqualifying United Nations Global Compact scores. The index then weights remaining companies within their respective GICS Sectors by their S&P DJI ESG Score resulting from the Corporate Sustainability Assessment (CSA), while maintaining the same sector balance as the parent index. According to S&P DJI, by maintaining sector neutrality with the eligibility universe, the index provides significant additional exposure to ESG factors, with relatively low tracking error to the broader market.
Reid Steadman, Managing Director and Global Head of ESG Indices at S&P DJI, said:
“Last year, ESG undeniably asserted itself as an essential strategy for the mainstream investor as the COVID-19 pandemic and social justice issues put the importance and relevance of corporate sustainability data and principles firmly in the spotlight. We are thrilled to work with the Santiago Exchange to continue expanding our ESG strategy in Latin America with the launch of the S&P IPSA ESG Tilted Index. This new index will be a useful tool for investors looking to bring ESG principles into the core of their investment portfolios with the goal of attaining performance largely in line with the Chilean equity market.”
José Antonio Martínez, CEO of the Santiago Exchange, added:
“Sustainability is a strategic cornerstone for the Santiago Exchange and the basis for our mission to publicize, disseminate and promote ESG best practices. As capital market articulators, by launching this new index we seek to encourage companies to manage ESG factors with the highest standards, while providing tools for better investment decision-making in order to boost the sustainable development of the market, and to allow Chilean issuers to position themselves globally.”