The initial step is to exclude the five lowest ESG-scoring companies from the index to give that first ESG tilt. To bring the number of constituents and sector exposures back in line with the standard EURO STOXX 50 index, the excluded companies are replaced with higher ESG-scoring companies from the same sectors. In addition, the EURO STOXX 50 ESG index filters out companies with undesirable revenue exposure to controversial weapons manufacturers, tobacco, thermal coal and those which are not complaint with UNGC principles.
Through this layered process the standard index is cleansed of non-ESG compliant constituents to provide an innovative European equity market solution for the growing sustainability-oriented investing community.
