Press Release – Solactive releases markets first index which orientates towards FNG-Label with ESG provider imug rating
As the topic of ESG gains momentum in the financial industry, the quantity of ESG branded solutions is rising, leaving investors in a maze of ESG branded options to choose from. In this context, independent ESG labels account for the identification of and the adherence to specific ESG standards and, therefore, serve as useful guidance for the socially responsible ESG investor. To support investors, Solactive has teamed up with ESG provider imug | rating, using data from Vigeo Eiris (VE), to develop the Solactive VE imug Developed Markets ESG Quality Index. This index is a rules-based market-standard ESG solution, which orientates towards the FNG-Label of “Forum für Nachhaltige Geldanlagen,” the Sustainable Investment Forum (SIF) for Germany, Austria, and Switzerland.
The Solactive VE imug Developed Markets ESG Quality Index is derived from the Solactive GBS Developed Markets Large & Mid Cap USD Index and aims to comply with the minimum standards of the FNG-Label. As part of these minimum standards, investments in nuclear power, coal mining, significant coal-fired power generation, fracking, oil sands, weapons and armaments are not permitted and a norm-based screening with respect to the UN Global Compact is carried out by imug. In addition, imug trials the methodology against an ESG Assessment and excludes companies with a score lower than 30 out of 100 points. Finally, to promote transparency and international norms, the index over-weights companies that are in line with TCFD reporting requirements and/or have signed TCFD and UN Global Compact. A non-binding pre-test on the minimum exclusions has been conducted by the auditor of the FNG-Label, the University of Hamburg, and the results had been fine at the time of testing
Roland Kölsch, Managing Director, QNG (FNG-Label) comments: “The FNG-Label, as an established, rapidly growing SRI quality standard, deliberately focuses on a set of minimum criteria to ensure the initial recognition of sustainable investments. If there is now an index that is not only based on the necessary minimum exclusions but also implements elements of a stock selection or other requirements such as transparency that go beyond these, this is a good starting point for financial products that want to work on the quality of sustainable investments by incorporating further criteria.”
Timo Pfeiffer, Chief Markets Officer at Solactive: “An ever-increasing number of asset managers and banks in Germany, Austria, and Switzerland use the FNG-Siegel to validate their sustainable investment products. In the meantime, we notice that more and more investors make the FNG-Siegel mandatory for their investments. With this index, we present an important element for investors that wish to orientate towards this ESG Quality standard.”
Frieder Olfe, imug | rating: “Being a founding member of the FNG, we are a strong advocate of quality standards and welcome the rise of the FNG-Label. The ESG Quality Index is the first index that explicitly orientates towards the minimum criteria of FNG-Label and tracks its evolution.”
Thomas Montagnon, Vigeo Eiris: “Since the beginning of the year, we have noticed a considerable increase in the number of funds labelled FNG-Siegel. Our goal is to promote and participate in this movement in the German-speaking markets and thereby participate in the transfer of capital flows to funds with an explicit sustainable strategy. Thus, we thought it would be appropriate to engage in the definition of a solid framework using our ESG expertise. With the ESG Quality Index, we are providing a tool that will allow investors to approach the FNG-Siegel labelling process with confidence.”