The FTSE Russell and Sustainalytics – a research firm specializing in environmental, social and governance, or ESG, investing – are partnering to offer new sustainable version of the popular Russell 1000, Russell 2000 and Russell 3000 indexes.
“FTSE Russell has been a leader in sustainable investment for nearly two decades and has been supporting the growing demand for ESG integration into passive strategies,” said FTSE Russell CEO Mark Makepeace in a press release. “The partnership with Sustainalytics enables us to provide a greater selection of options and choice to meet these ever growing client demands.”
Slated to be available in the first six months of 2019, the new funds are the latest example of ESG criteria growing in importance in international finance.
American portfolios that include ESG criteria are worth $11.6 trillion (€10.2 trillion/CHF11.57 trillion), a 44 percent increase compared to 2016, according to the US SIF Foundation.
S&P Dow Jones Indices launched a sustainable version of the S&P 500 in 2015. Other large mutual funds also offer so-called “responsible” funds.
The two companies have already been working together on smaller projects. Trends suggested they needed to embrace a more ambitious collaboration, said Michael Jantzi, CEO of Sustainalytics. The funds will initially focus on U.S. assets but will evolve as ESG options grow.
“The partnership will provide valuable tools for ESG integration and product creation,” Jantzi said.