Combination of high-quality index construction and data-driven insights offer customizable strategies for biodiversity investment
NEW YORK & ZUG (May 22, 2023) — ISS ESG, the sustainable investment arm of Institutional Shareholder Services Inc. (ISS), and Qontigo, a leading global provider of innovative index, analytics and risk solutions, today announced the release of the ISS STOXX Biodiversity Index Suite to mark the U.N.’s International Day for Biological Diversity.
The new cobranded index suite helps interested clients align portfolios with their biodiversity impact reduction goals. All indices in the suite exclude companies involved in activities assessed to be causing significant harm to biodiversity or reducing the biodiversity footprint. They also enhance alignment with biodiversity-oriented U.N. Sustainable Development Goals (SDGs), such as life below water and life on land. At the same time, the index methodology targets an aggregate reduction in carbon intensity of at least 30 percent across the included constituents.
In addition to the baseline family, the suite also includes a Biodiversity Leaders family which consists solely of companies deriving at least 20 percent of their revenues from activities that are deemed to make a positive net contribution to the SDGs. These activities include preservation of marine ecosystems and sustainable agriculture and forestry.
“Biodiversity is one of the paramount themes of our age and calls for investors to understand and address its associated risks in their investment portfolios. 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.”Axel Lomholt, Chief Product Officer for Indices & Benchmarks at STOXX
Each new index family uses a granular index construction methodology, built on ISS ESG’s extensive datasets and a three-part framework to select index constituents based upon an avoid, minimize and enable approach: avoid companies involved in activities causing harm to biodiversity; minimize exposure to companies with negative impacts on biodiversity; and capture companies enabling positive impact on biodiversity through scoring high on biodiversity solutions. Importantly, this framework goes beyond simple exclusion criteria, positively screening for companies with low negative impact on biodiversity and those companies actively enabling the planet’s biodiversity – in line with COP15 goals.
“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 ESG powering highly differentiated index offerings and we are delighted to partner with Qontigo on this series.”Lorraine Kelly, Global Head of Investment Stewardship at ISS
About ISS ESG
ISS ESG solutions enable investors to develop and integrate sustainable investing policies and practices, engage on sustainable investment issues, and monitor portfolio company practices through screening solutions. It also provides climate data, analytics, and advisory services to help financial market participants understand, measure, and act on climate-related risks across all asset classes. In addition, ESG solutions cover corporate and country ESG research and ratings enabling its clients to identify material social and environmental risks and opportunities. ISS ESG is part of the Institutional Shareholder Services (ISS) group of companies, which is majority owned by Deutsche Börse Group, along with Genstar Capital and ISS management. ISS operates on an arm’s-length basis and Deutsche Börse has adopted Principles protecting the independence and integrity of ISS’ research offerings. For more information, please visit us at: www.iss-esg.com
Qontigo is a leading global provider of innovative index, analytics and risk solutions that optimize investment impact. As the shift toward sustainable investing accelerates, Qontigo enables its clients—financial-products issuers, asset owners and asset managers—to deliver sophisticated and targeted solutions at scale to meet the increasingly demanding and unique sustainability goals of investors worldwide. Qontigo’s solutions are enhanced by both our collaborative, customer-centric culture, which allows us to create tailored solutions for our clients, and our open architecture and modern technology that efficiently integrate with our clients’ processes. Part of Deutsche Börse Group, Qontigo was created in 2019 through the combination of Axioma, DAX and STOXX. Headquartered in Eschborn, Germany, Qontigo’s global presence includes offices in New York, London, Zug and Hong Kong. www.qontigo.com