Northern Trust Asset Management has rolled out a sustainable emerging market green transition index strategy, which focuses on climate change.
The new strategy is said to complement Northern Trust’s existing World Green Transition Index strategy, which was introduced in 2019.
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Combined, these strategies enable investors to get climate-aware exposure to the MSCI ACWI universe through custom indices designed by Northern Trust Asset Management and managed by MSCI.
They leverage the MSCI World Index and the MSCI Emerging Markets Index as their parent indices.
Northern Trust Asset Management senior sustainable investing strategist, for Europe, Middle East, Africa and Asia-Pacific Valeria Dinershteyn said: “We are pleased to offer this latest strategy which enables our clients exposure to equities that combine ESG screens with a climate aware approach, whilst harnessing the exposure to emerging markets.”
The new green transition index strategy will incorporate the company’s proprietary Environmental, Social and Governance (ESG) exclusion approach with screens to lower climate related risks.
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By GlobalDataIt will include positive tilts to scale up opportunities to benefit from the transition to a low carbon economy.
The screens include fossil fuel exclusions and energy screen, to cut down current and potential exposure to carbon emissions and minimise exposure to related risks.
Positive tilts will be then applied to companies having green revenues and a strong climate strategy with the help of MSCI Transition Risk Management Score.
Northern Trust Asset Management EMEA head Marie Dzanis commented: “This latest strategy underlines Northern Trust Asset Management’s continued innovation, industry collaboration and focus on sustainability. We strive to ensure we meet our clients’ needs and better serve investors on their journey to a lower carbon economy.”
Northern Trust Asset Management, which oversees $1trn in assets, has over 30 years of expertise in sustainable investing.
A year ago, Northern Trust pushed deeper into responsible investing with the launch of several sustainable quantitative solutions such as the Emerging Markets Quality Low Carbon Strategy.
