New ESG index launches

Index firm Solactive AG and ARC Responsible Investment have launched a new index that utilizes big data to track stocks with high environmental, social and governance (ESG) scores.

The Solactive ARC ESG Big Data Europe Index consists of European stocks with high-performing ESG rankings, based on data provided by alternative data company OWL Analytics and Investment Research.

OWL Analytics aggregates hundreds of ESG data sources to generate its scores and rankings. Solactive then screens the list of high-ranking firms for characteristics such as liquidity, dividend-yield and risk to select the index components.

“We are incorporating cutting-edge ESG metrics derived from a big data approach, thereby excluding non-compliant activities and sectors as well as polluting companies, which allows our clients to access the latest innovations in ESG,” Timo Pfeiffer, head of research at Solactive, said in a statement.

“The index allows investors to benefit from an innovative and smart ESG approach while reducing the overall risk of the portfolio, achieved thanks to various risk factors,” added Xavier Ducros, founding partner at ARC Responsible Investment.

HSBC has licensed the index to create investable products for its clients.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.