FTSE Russell introduces FTSE4Good TIP Taiwan ESG Index

Dec 18th, 2017 | By | Category: ETF and Index News

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FTSE Russell has launched the FTSE4Good TIP Taiwan ESG Index, developed in partnership with Taiwan Stock Exchange. The index provides a reference for the performance of Taiwan-listed firms with high ESG scores, according to the FTSE4Good rating methodology.

Taiwan ETFs

The index tracks Taiwan-listed equities from firms with high ESG ratings.

The FTSE4Good Index Series is designed to help investors integrate ESG factors into their investment decisions.

The underlying methodology identifies companies that better manage ESG risks and the resultant indices can be used as the basis for index-linked products such as exchange-traded funds or as a performance benchmarks.

The methodology assesses companies based on over 300 indicators, both qualitative and quantitative, covering 14 themes which include, among others, health & safety, labour standards, human rights, water use, biodiversity, climate change, tax transparency, and anti-corruption.

The indicators are combined to produce three scores for each firm based on each ESG pillar. Collectively the three pillars produce a total ESG score for the firm between 0-5. Companies with a score of 3.2 or higher are selected for inclusion in the index.

Companies engaged in certain undesirable activities (such as weapons or tobacco manufacturing), or those embroiled in controversy, will be automatically excluded.

The FTSE4Good Index series was originally launched in 2001 and has since expanded to include US, European, and global indices reflecting the significant increase in the number of institutional investors seeking to integrate ESG considerations into their portfolios.

Jan-yau HSU, chairman of Taiwan Index Plus (TIP), the indexing subsidiary of Taiwan Stock Exchange, said, “As sustainability has become an important part of investment decisions among international communities, market participants and regulators in Taiwan are placing a high priority in addressing and promoting social responsibility investment and stewardship according to globally established ESG standards. Supported by TWSE, we are pleased to deepen our partnership with FTSE Russell to develop the FTSE4Good TIP Taiwan ESG Index, the first domestic benchmark to reflect the performance of Taiwanese companies in environmental, social and governance areas. This represents a new milestone for sustainable investing in Taiwan.”

Jessie Pak, managing director, Asia, FTSE Russell, added, “FTSE Russell has been partnering with the Taiwan Stock Exchange for over 15 years to deliver globally recognised benchmarks for the Taiwanese market. We are delighted to be building on this strong relationship to work with TIP to create benchmarks that support the growing market demand for sustainable investment and ESG products. FTSE Russell continues to be a leading innovator in the development of sustainable investment and ESG data models and indexes, proactively supporting our clients to incorporate ESG objectives in their investment strategies.”

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