Exchange in Focus: B3 Launch the S&P/B3 Brazil ESG Index
9 September 2020
S&P Dow Jones Indices (“S&P DJI”) and B3 (Brasil, Bolsa, Balcão), the largest exchange in Latin America, announced the debut of the S&P/B3 Brazil ESG Index, the latest in S&P DJI’s growing family of global ESG indices based on some of the world’s most highly-tracked regional and country-specific benchmarks.
The index uses a rules-based selection criteria based on relevant ESG principles to select and weight its constituents from the S&P Brazil BMI (Broad Market Index) that are locally listed on the B3. The objective is to give investors core exposure to the Brazilian equities market while providing a significant boost in ESG score performance.
“In the last year, ESG has joined the mainstream of investing as market participants increasingly see the importance and relevance of indices that incorporate sustainability data and principles,” said Reid Steadman, Managing Director and Global Head of ESG Indices at S&P DJI.
“We have designed the S&P/B3 Brazil ESG index with the goal of enabling these investors to achieve their ESG investment goals while attaining performance largely in line with the market. We’re thrilled to work with the B3 to bring this strategy to the Brazilian market.” “At a time when ESG is becoming increasingly relevant for investors worldwide, B3 is bringing a new index to the market to add to its portfolio of sustainable benchmarks and provide investors with yet another alternative in this segment,” said Gleice Donini, B3's Head of Sustainability.
The S&P/B3 Brazil ESG Index starts with an Index Universe of all companies actively trading on the B3 as local listings that are members of the S&P Brazil BMI, S&P DJI’s broadest country index representing the Brazilian equity market. Companies involved in controversial weapons, tobacco, thermal coal and companies with disqualifying United Nations Global Compact scores are excluded. Remaining eligible companies are then weighted in the index by their S&P DJI ESG Score resulting from the Corporate Sustainability Assessment (CSA). Companies with no S&P DJI ESG Score are excluded from the index.
At launch, the S&P/B3 Brazil ESG Index has 96 constituents.
Part of a global trend
Over 40 markets world-wide are covered by sustainability-related indexes. To learn more, visit the SSE’s database of stock exchange sustainability activities. Currently, the database has data on 102 stock exchanges and tracks progress on key activities where exchanges are promoting sustainable business and investment practices. It is the largest data set of its kind and the data is freely accessible. About the SSE
The SSE initiative is a UN Partnership Programme organised by UNCTAD, the UN Global Compact, UNEP FI and the PRI. The SSE’s mission is to provide a global platform for exploring how exchanges, in collaboration with investors, companies (issuers), regulators, policymakers and relevant international organizations, can enhance performance on ESG (environmental, social and corporate governance) issues and encourage sustainable investment, including the financing of the UN Sustainable Development Goals. The SSE seeks to achieve this mission through an integrated programme of conducting evidence-based policy analysis, facilitating a network and forum for multi-stakeholder consensus-building, and providing technical assistance and advisory services.
