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Solactive and LGIM collaborate on ESG Index family


Index provider Solactive has released the Solactive L&G ESG Index Family targeted at investors who wish to go further in integrating ESG factors into their investment strategy.

The firm writes that this launch is the result of collaboration between Solactive and Legal & General Investment Management (LGIM), which combines LGIM’s proprietary Environmental, Social and Governance (ESG) scoring system– with Solactive’s multi-asset expertise in the development of innovative indices.

With this new launch, Solactive expands its range of ESG indices, offering exposure to each region in the Developed Markets Equity universe, including Asia-Pacific, Europe, Japan, North America, and the UK. On the fixed-income side, the new indices provide coverage of the investment grade corporate bond market denominated in EUR, USD and GBP.

Using the Solactive Global Benchmark Series as starting universe, the indices exclude companies operating in controversial industries, such as weapons, coal mining, and those that are perennial violators of the United Nations Global Compact Principles. In addition, each index adopts an ESG-based weighting scheme, assigning more weight to companies with a higher L&G ESG score.

Timo Pfeiffer, Head of Research at Solactive, says: “This is quite a big achievement for Solactive, as these launches help us fulfil our commitment to enlarge the range of ESG strategies available in the market.

“With increasing focus from investors and regulators alike, sustainability is becoming the rule, rather than the exception. We are very excited to team up with LGIM and bring to life the Solactive L&G ESG Index Family.”

The Solactive L&G ESG Index Family is used as the basis for funds launched by LGIM. The equity indices are available in three different versions: price return, total return and net total return. These are published in GBP and are readjusted semi-annually. The Solactive L&G ESG Bond TR Index Series is rebalanced on a monthly basis.

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