Zug (Oct. 21, 2019) – Qontigo’s global index provider STOXX Ltd. has licensed the EURO STOXX 50 ESG-X Index to Scotiabank to serve as an underlying asset for structured products.
The EURO STOXX 50 ESG-X Index includes a product involvement screening that follows the United Nations Global Compact principles of human and labor rights, the environment, business ethics and anti-corruption. STOXX cooperates with the ESG data provider Sustainalytics for the screening.
“Scotiabank is pleased to launch the first Principal Protected Note in Canada linked to STOXX ESG-X indices, an innovative product for investors looking to integrate environmental, social, and governance criteria into their portfolios,” said Pruyn Haskins, Global Head, Equities at Scotiabank. “Scotiabank is proud to help grow and support the market for sustainable investment products in Canada and around the world.”
“Historically, exclusions have been employed for custom indices. Discussions with key market participants showed increasing requests from asset owners for liquid benchmarks with standardized exclusionary rules in line with their responsible-investing policy,” said Willem Keogh, STOXX’s Head of ESG, Thematic and Factor Solutions. “The ESG-X version of the iconic EURO STOXX 50 uses a free-float market cap weighting similar to the highly traded Eurozone benchmark index. It is easy to implement as a benchmark for asset owners and well-suited to serve as an underlying for derivatives, structured products or exchange traded products.”
The EURO STOXX 50 ESG-X Index shows a risk-return profile similar to its parent index and offers investors a European benchmark with exclusion criteria that are aligned with the responsible investment policies of leading asset owners.
In the selection process of the index, industry, region and country filters are applied to ensure diversification. Companies that are in contravention of the UN Global Compact Principles or are involved in Controversial Weapons activities, as identified by Sustainalytics, are excluded.