Moscow Exchange to Launch ESG-Based Indices

The Russian firm is tapping into growing demand for sustainable investment options

Moscow Exchange announced on Thursday that it is going to begin publishing sustainability data.

The Russian firm said that it would be providing market participants with indices which evaluate companies’ environment, social and governance (ESG) profiles.

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In order to gather that information, the exchange operator will be working alongside the Russian Union of Industrialists and Entrepreneurs (RSPP).

Each year, the RSPP gathers ESG data on a number of different companies. The new indices will only include those companies which provide a sufficient volume of ESG-based data.

Based on that information, the Moscow Exchange will be publishing two indices – the MOEX-RSPP Responsibility and Transparency Index and the MOEX-RSPP Sustainability Vector Index.

The former will be comprised of twenty-two companies that have the best ESG record. The latter, which will be made up of fifteen firms, will show which companies have made the most progress – compared to the previous year – in improving their ESG profile.

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Both indices, which will be reviewed on an annual basis, are going to be published by the Moscow Exchange and the RSPP.

Moscow Exchange – riding the ESG bandwagon

The announcement comes amidst growing interest in so-called ‘sustainable investments’ on the part of both investors and regulatory authorities.

Just last week, Ashley Alder, the chief executive officer of the Hong Kong Securities and Futures Commission, gave a speech to buy-side firms entirely devoted to the subject.

The regulatory executive said, amongst other things, that asset managers are going to have to start clarifying how they evaluate the ESG components of their investments.

A week prior to that speech, Japan’s Financial Services Agency announced that it was creating a new position – chief sustainable finance officer.

Buy-side firms have also taken a large swig from the (recyclable) bottle of ESG kool-aid.

AllianceBernstein, for instance, has an entire blog devoted to the subject on its website. It is also now common for firms to provide clients with an ESG policy.

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