Saturday 1st October 2016                 Change text size:

New responsible investment tool launched by Thomson Reuters



business-analysis-by-Ken-Tegardin

Thomson Reuters has launched a new set of indices that will measure environmental, social and governance (ESG) practices at European companies. They become the latest of several tools launched in recent years to aid responsible investors, as the sector moves into the mainstream.

The four indices will be part of the global Thomson Reuters Corporate Responsibility Indices (CRI), which aim to provide comprehensive, objective and transparent rules-based benchmarking solutions for measuring global ESG performance.

Investors can use the tool to apply filters based on the industry, country and regional focus of a company’s operations and does not use negative screening. Rather than using corporate statements, which can often be confusing and vague, the indices use quantitative outcomes that allow users to easily compare companies.

Stephan Flagel, head of indices at Thomson Reuters, said, “As responsible ESG investing continue to gain traction around the world, Thomson Reuters remain committed to delivering the most comprehensive and transparent family of indices available today in order to give investors the benchmarks they need to make informed decisions.”

Live calculation of the indices began on July 28 2014, with historical data going back to December 31 2007.

Recent research has linked sustainability initiatives to investment stability. A study from researchers from Boston University found that companies with strong sustainability initiatives see less risk in their stock prices during economic downturns, benefiting the company, shareholders and wider society.

Photo: Ken Tegardin

Further reading:

Morgan Stanley asks students for sustainable investment solutions

Ethical investment: using negative screen to avoid ‘sin stocks’ is a thing of the past

Alternative Wall Street Journal: the financial advantage of socially responsible investing

FTSE: sustainability at the world’s leading investment index provider

The Guide to Sustainable Investment 2014


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