July 2021
AAM Magazine
July 2021
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New Zealand Exchange and S&P launch ESG tilted index

By Hui Ching-hoo   
July 21, 2021

New Zealand’s Exchange (NZX) and S&P Dow Jones Indices have launched an environmental, social and governance benchmark that will give investors exposure to locally-listed companies with high ESG performance.

The S&P/NZX 50 Portfolio ESG Tilted Index overweights or underweights companies based on their ESG score, and excludes “sinister” industries such as tobacco producers, S&P Dow Jones and NZX say in a joint statement on July 20.

It is based on the S&P/NZX 50 Portfolio Index, which comprises the same constituents as the benchmark S&P/NZX 50 Index, but with a 5% cap on float-adjusted market capitalisation.

“There is a real interest and growing focus on ESG, and this index now provides a performance benchmark for the development of product that the market is demanding,” NZX Chief Executive Mark Peterson says in the statement.

“With the heightened focus on the impact of companies’ environmental, social and governance footprints, this index serves as an independent and transparent tool in measuring ESG performance as more investors incorporate sustainability targets in their investment decisions,” adds Jaspreet Duhra, global head of ESG indices at S&P Dow Jones.