Northern Trust enhances ESG offerings
02 November 2012
By Asia Asset Management
Northern Trust has bolstered its range of solutions for institutional investors seeking socially responsible investing options through an agreement with MSCI ESG Indices and MSCI ESG Research. Using MSCI’s environmental, social, and governance (ESG) research, ratings, and screening tools, Northern Trust will be able to provide customisable ESG solutions to its clients.
“Northern Trust has a broad commitment to responsible investing and is dedicated to providing our clients with customisable index solutions that help them meet their ESG objectives,” said Steve Potter, global head of asset management at Northern Trust. “We are increasingly seeing growth in ESG portfolios as investors become more aware of ESG factors and their possible influence on a corporation’s financial profitability and brand reputation.”
“Our clients are looking for thoughtful, customised ESG solutions which address their requirements not only for good governance and social intent, but in generating returns,” he added.
Northern Trust clients looking to integrate ESG factors in their investment portfolios can, through the agreement with MSCI, now access 79 distinct indices ranging from global ESG best in class to regional responsible investing themes, such as clean technology, and further customise these according to their unique requirements. Northern Trust is also working with MSCI to create custom ESG indices for passive institutional funds.
The firm manages approximately US$17 billion in socially screened, active and passive managed portfolios for clients across the globe and has close to 25 years of experience managing socially responsible portfolios and socially-screened assets. This agreement demonstrates Northern Trust’s long-term global commitment to developing responsible investing products and adds to its existing portfolio of responsible investing solutions, including the Northern Trust Global Sustainability Index Fund (Ticker: NSRIX). The Global Sustainability Index Fund was the first mutual fund to track a global sustainability index and rates, and was awarded a Gold award by Standard & Poor’s Equity Research in its U.S. Mutual Fund Excellence Awards Program.
“MSCI is delighted to be working with Northern Trust to offer a range of global ESG indices to institutional investor clients,” said Remy Briand, managing director and head of MSCI Index and ESG Research. “MSCI ESG Research’s objective is to provide investors with a broad range of tools to integrate ESG factors across classes according to their specific requirements.”
“By licensing all of the MSCI ESG indices we have full access to the best-in-class research and analysis undertaken by MSCI,” said Mamadou-abou Sarr, senior product specialist for global index management at Northern Trust. “This will allow us to efficiently and economically implement passive ESG investment portfolios for our clients around the world.”
According to a study conducted by Northern Trust in 2011, Customised Beta - Changing Perspectives on Passive Investing, 44% of investors surveyed indicated that their responsible investing allocations had increased in the past two years.
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