Institutional Shareholder Services’ (ISS) responsible investment arm, ISS Environmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. More and risk, analytics and index solutions provider Qontigo announced today the launch of the ISS STOXX Biodiversity Index Suite, aimed at helping investors to align their portfolios with biodiversity impact reduction goals.
According to a blog post by Antonio Celeste, Qontiigo’s Director for Sustainability Product Management, the launch comes as “those at the forefront of responsible investing are increasingly looking to integrate biodiversity considerations in portfolios,” both to manage risk and to capture emerging biodiversity opportunities, adding:
“For many observers, the Kunming-Montreal Global Biodiversity Framework (GBF) accord could do for biodiversity what the Paris Agreement did for climate: become a tipping point for targeted investment flows.”
The new index suite utilizes both exclusions and positive screens, using ISS ESG’s datasets, and a 3-part framework to select constituents based on a “avoid, minimize and enable” approach that avoids companies involved in activities causing harm to biodiversity, minimizes exposure to companies with negative impacts on biodiversity and captures companies enabling positive impact on biodiversity through biodiversity solutions.
The index suite also includes a “Biodiversity Leaders” family, targeting companies that derive at least 20% of revenues from activities assessed as making a positive net contribution to UN Sustainable Development Goals (SDGs), including preservation of marine ecosystems and sustainable agriculture and forestry.
Lorraine Kelly, Global Head of Investment Stewardship at ISS, said:
“Investor focus on managing biodiversity impact has the potential to become as significant and enduring as the current focus on climate change. The ISS STOXX Biodiversity Index Suite is the latest example of ISS Environmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. More powering highly differentiated index offerings and we are delighted to partner with Qontigo on this series.”
Axel Lomholt, Chief Product Officer for Indices & Benchmarks at Qontigo’s index-focused division STOXX, added:
“This launch comes as global investors are urged by some to account for and price nature into their sustainable investment strategies, and we are confident that the unique combination of our high-quality STOXX index suite, together with ISS ESG’s rigorous data sets, will prove valuable in enabling investors to align with their biodiversity objectives.”
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