FTSE Global Choice Index Series
FTSE Russell has launched the FTSE Global Choice Index Series, the first FTSE Russell standard index family to incorporate several categories of ESG-related exclusions in its design. Increasingly, investors are looking to exclude stocks from their portfolios based on the impact of companies’ products and conduct on society and the environment. In addition to the standard index family, clients can construct bespoke ‘Choice’ indexes using an innovative ‘building blocks’ approach, to customise alignment with their particular values and investment objectives.
The FTSE Global Choice Index Series is a market capitalisation weighted index series with a rules-based methodology for defining how the products and conduct of a company impact society and the environment. The result is a framework for applying robust and customisable values-based exclusions to a broad market index.
The FTSE Global Choice Index Series consists of the following indexes:
- FTSE Global All Cap ex US Choice Index.
- FTSE US All Cap Choice Index.
- FTSE Developed ex Australia ex Non-Renewable Energy/Vice Products/Weapons Index.
The index series includes negative screens in three product categories and two conduct categories:
The product-related screening criteria covers:
- Non-Renewable Energy (Fossil Fuels and Nuclear Power).
- Vice Products (Adult Entertainment, Alcohol, Gambling and Tobacco).
- Weapons (Civilian Firearms, Controversial Weapons and Conventional Military Weapons).
The conduct-related screening criteria covers:
- Controversies (based on the UN Global Compact Principles).
- Diversity practices
The FTSE Global Choice Index Series is part of FTSE Russell’s extensive sustainable investment index and data offering which includes the Smart Sustainability indexes, FTSE4Good indexes, Green Revenues data model and ESG Ratings.
Millennials and female investors seeking ESG products: Q&A with FTSE Russell's Arisa Kishigami & Vanguard's Rachel White
- What was the motivation behind launching the FTSE Global Choice Index Series and has there been a lot of demand for these kinds of indices from institutional investors?
The digital age has brought increased transparency and scrutiny to the way companies do business, giving institutional investors a clearer view into company practices and sources of revenue. This has led to increased demand for tools, including indices that help investors align their values with their portfolios by selecting companies based on their impact on society and the environment. Given the range of regional and client segment preferences, we expect to see more demand for additional versions to the FTSE Global Choice indices in the future.
- How does FTSE Russell address the differing views and definitions around sustainable investing?
There is a vast array of terminology and definitions when it comes to sustainable investing, and people’s values can be quite varied. At FTSE Russell we have a track record of expertise in sustainable investing, dating back to 2001 with the launch of the FTSE4Good indices. A lot has changed over that time but one thing that hasn’t changed is the search for consensus around terms, definitions, and standards.
Among institutional investors, particularly large asset owners, the exclusionary approach to sustainable investment has long been an important tool in the toolkit. More recently many of those asset owners have shifted to a more integrated approach to sustainable investing but there is still a need for exclusion-based methodologies.
In order to deliver values-aligned investment solutions effectively you have to start by translating a broad and relevant set of environmental, social and governance (ESG) issues into definable, measurable characteristics of a company. That’s why we launched the FTSE Global Choice Index Series - to provide a tool for investors that want to align their investment choices with their values.
Head of Business Development Aus & NZ
t: +61 (0)2 8823 3523