Barclays and global indexing firm MSCI have co-launched a series of fixed income indices that they say will help “stimulate” the growth of sustainable investment.
The pair says that the more than 500 indices, which fall under three broad categories, are the first benchmarks to incorporate environmental, social and governance (ESG) factors in the fixed income asset class, where payments of a fixed amount are made on a fixed schedule.
Indices in the first category, the Barclays MSCI Socially Responsible Indices, exclude areas that may be contradictory to businesses or investors with particularly strong ethics or values.
Those in the second, the Barclays MSCI Sustainability Indices, look at best-in-class investment, including corporate social responsibility (CSR) factors. Finally, the Barclays MSCI ESG Weighted Indices use an ESG rating system to attract mainstream investors.
Institutional investors such as pension funds, hedge funds and mutual funds will be able to develop products that link to or track the indices across all three categories.
Waqas Samad, head of index, portfolio and risk solutions at Barclays, said the launch of the indices represent an “important milestone” in the ESG fixed income sector. Meanwhile, Baer Pettit, head of the MSCI index business, added that the benchmarks would “stimulate growth of ESG investment in this key asset class.”
For Barclays, the MSCI collaboration marks another step in the right direction after a turbulent year that saw the firm rapped for numerous scandals and misdemeanours. Chief executive Antony Jenkins, who replaced Bob Diamond in August 2012, has been vocal in his efforts to implement strong ethical values at the bank since his arrival.