ESG indices and investments

ReutersStephan Flagel, Head of Indices for Thomson Reuters, discusses the next area of interest for Environmental, Social and Governance Indices in a video (see below).

Formerly, investors expected an ESG index to outperform the broad market, arguing that an ESG tilt is a reflection of good governance; but, increasingly, investors require market returns with the ability to understand the ESG factors of their investments more granularly. Stephan Flagel gives more detail on the move from simply using ESG indices as a screening mechanism, to using them in a more sophisticated way as an input into the long term valuation of individual companies.

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