Friday 28th October 2016                 Change text size:

FTSE Russell and Johannesburg Stock Exchange launch new ESG indexes

The Johannesburg Stock Exchange building taken by Andres de Wet

FTSE Russell, the global index provider, today announces the launch of the FTSE/JSE Responsible Investment Series, developed as a result of the expanded partnership between FTSE Russell and Johannesburg Stock Exchange (JSE), announced earlier this year. These indexes are available from today.

FTSE Russell and JSE have seen a significant increase in the number of institutional investors wanting to integrate ESG considerations into their investments. As a result, the businesses are collaborating to develop a suite of tools for the market to aide ESG integration. The new index series will initially comprise the FTSE/JSE Responsible Investment Benchmark and a Top 30 Index, containing the top thirty companies as ranked by the FTSE ESG Ratings. The launch builds on the existing FTSE/JSE Africa Index Series.

The FTSE ESG Ratings, which act as a basis for the new index series methodology, provide objective ESG exposure and performance data that is based on clear and easy to apply methodologies. They encompass an overall Rating that breaks down into underlying Pillar and Thematic Scores that themselves are built on more detailed indicator assessments. This allows investors to understand a company’s ESG practices in multiple dimensions.

David Harris, Head of ESG, FTSE Russell, said: “Investors in companies listed on JSE now have a suite of new indexes and supporting data, based on FTSE Russell’s new global ESG methodology, to integrate ESG into their investment and stewardship decisions. South African listed companies are ranked highly for ESG performance in Emerging Markets due to their high quality of ESG practices and reporting. JSE has championed and encouraged sustainability disclosure for many years, making it the ideal partner for FTSE Russell to develop innovative ESG products for this market.”

Head of Sustainability at the Johannesburg Stock Exchange, Corli Le Roux said: “Today’s launch indicates a firm commitment by both the JSE and FTSE Russell to advance responsible investment and builds on the JSE’s decade-long experience in helping companies integrate the principles of the triple bottom line and good corporate governance into their business practices. Collaborating with FTSE Russell on expanding our efforts in sustainability offers a number of synergies and benefits for both organisations and our clients, and was thus a logical opportunity for us to pursue.”

The collaboration between FTSE Russell and JSE reflects both businesses’ long term commitment and track record of innovation in the ESG and sustainability areas. FTSE Russell has long been at the forefront of development since launching the FTSE4Good Series in 2001, and has continued to both enhance and grow its ESG product and services. JSE is also recognised as a leading pioneer in promoting sustainable and transparent business practices across its markets.

Following the recent efforts by the UN’s Sustainable Stock Exchange (SSE) initiative to encourage improved ESG data reporting, partnerships such as FTSE Russell and JSE’s are becoming increasingly important. This co-operation provides tools for the investment community whilst at the same time catalysing best practice ESG reporting among corporate issuers.

To launch the new index series, David Harris today attended a Market Open Ceremony at Johannesburg Stock Exchange. Further details around the index series will be discussed at tomorrow’s 5th Annual Africa ESG Forum in Cape Town.

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