Number of ESG indices globally sees record rise


Over the past year, the number of indices measuring environmental, social and governance (ESG) criteria has shot up by 40% as interest in sustainable investing reaches new records, according to the fourth annual Index Industry Association’s Benchmark Survey.

This follows a 13.9% increase in the number of ESG indices between 2018 and 2019 and marks a record year-on-year jump in any single major asset class in the survey’s four-year history.

Undoubtedly, this has been driven by the ever-increasing client demand for ESG offerings and the subsequent proliferation of ESG ETF launches, as some of the world’s largest asset managers, such as BlackRock, look to respond to this demand.

ESG, fixed income and active ETFs lead global demand

Rick Redding, CEO of the IIA, said: “The survey’s 2020 results demonstrate a highly competitive industry that continues to broaden its offerings to meet investor demand.

“Indices today are transparent and reliable representations of market segments covering a wide spectrum of asset classes and investment themes, and an integral piece of the global investor’s toolkit.”

Meanwhile, the number of fixed income indices available globally also continued to grow, increasing by 7.1% over the past 12 months and 15% over a two-year period, with notable growth in the number of ESG fixed income indices this year.

However, Redding said that “growth in fixed income was demonstrated across the full range of index subcategories, whereas equities growth was primarily concentrated in industry/sector, thematic, and ESG-related products”.

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The total number of indices available to investors globally has increased by around 3% to sit at 3.05 million, the IIA said.

The annual survey collates historical information submitted by the IIA’s members, including Bloomberg, Morningstar and MSCI, and is representative of the global index industry as a whole.



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