Solactive has launched the Taiwan Sustainability Index (TWNSI), which tracks the performance of companies that are identified as top corporate sustainability practitioners in Taiwan.
The index’ development is the first cooperation between Solactive and a higher education institution, the National Taipei University College of Business, which approached Solactive with a proprietary index concept.
Based on the academic research of sustainability factors, the selection of the index components involves a screening of corporate social responsibility (CSR) performance, financial performance, and market quality. Evaluation of over 300 questions covering social, economic, environmental, and disclosure (SEED) dimensions, assigns each company to an individual Total Sustainability Score, which identifies the stock’s CSR performance and eventually assesses their eligibility for inclusion in the index.
“For contemporary investors, screenings for ESG aspects like corporate social responsibility become more and more essential when considering their investments strategies, says Timo Pfeiffer, Head of Research at Solactive. “Therefore, it is hardly surprising that our first client from the academic environment, which we are very proud of working with, chose this factor when developing their first index strategy.”
The index constituents are weighted according to Free Float Market Capitalisation, however, are allowed a maximum weight of 30 per cent for each constituent to avoid concentration risk. Contingent on its current year performance, the index composition is assessed annually.
The President of National Taipei University, Professor Lee Chen-Jai, says: “The National Taipei University is honoured to collaborate with the Taiwan Institute for Sustainable Energy for the development of the Taiwan Sustainability Index (TWNSI). It is also an honour to have Solactive work with us to fulfil the index calculation and publishing via Bloomberg and Reuters. The index highlights the insistence of our College of Business on corporate sustainability teaching and research, which is believed to exert innovative and positive social impact on our financial market.”