Socially responsible investment in the Japanese equity market: UBS lists MSCI Japan SRI ETF on the London Stock Exchange

The new UBS ETF physically replicates a single benchmark in the MSCI Global SRI Index family. This ETF offers investors the opportunity to invest in companies whose business concepts and products meet the strictest criteria in the areas of environmental protection, social responsibility and corporate governance (Environmental, Social & Governance, ESG). To do this, MSCI Global Socially Responsible indices rely on a combination of negative and positive screening. They exclude companies whose activities are not in line with certain values. For example, those who manufacture products which have a highly detrimental impact on the environment and on society. Conversely, SRI indices also aim to include those companies with the highest ESG ratings in their own sectors. By doing this, they seek to ensure that companies that operate in ways that are particularly socially and environmentally beneficial are included in the index. This gives investors transparent and low-cost access to a range of SRI-screened companies on the Japanese equity market whose assets meet strict sustainability criteria.

"Investors are increasingly looking to access companies whose business activities are in harmony with social values and whose approach to managing environmental, social and corporate governance risks is first-rate", explains Andrew Walsh, Head of UBS ETF Sales UK & Ireland. "It follows that deciding to invest in a sustainable way isn't about following a trend. On the contrary, the investment decision is primarily about striving for values and sustainability." Even so, socially responsible investment, performance and diversification are not mutually contradictory, as is clear from a comparison of the MSCI Japan Socially Responsible with its parent index, the MSCI Japan. While the latter lists many more equities, both indices performed in very much the same way over the past five years; indeed, the MSCI Japan Socially Responsible performed slightly better through that period.

The new UBS ETF enhances the existing UBS ETF offerings to include the MSCI Global SRI Index family, which already enables investors to access sustainability-driven companies in other developed markets and emerging countries, while at the same time facilitating not only diversified investments in the MSCI World SRI and the MSCI Emerging Markets SRI, but also more targeted exposures in individual regions, such as North America, Europe and the Middle East, as well as the Pacific Rim.