Euronext has announced the launch of the BEL® ESG index, a new index identifying and tracking the companies within the BEL® 20 and the BEL® Mid indices that have demonstrated the best ESG practices.
The BEL® ESG Index is designed to facilitate the adoption of mainstream ESG investment solutions by investors. It is the fifth ESG Index variant for national blue-chip indices, following the launch of the CAC® 40 ESG (France), the MIB® ESG (Italy), the AEX® ESG (The Netherlands) and the OBX® ESG (Norway).
For the index market data, Euronext has partnered with Sustainalytics, a leading global provider of ESG research, ratings and data. Sustainalytics provides the ESG assessment of companies for the composition of the index. The BEL® ESG has been designed to be fully compliant with the Central Labelling Agency’s ‘Towards Sustainability’ label, a high-quality standard for sustainable financial products such as indices and funds.
The BEL® ESG’s selection methodology is as follows:
- The index universe comprises companies within the BEL® 20 and BEL® Mid indices meeting specific free float market cap and velocity criteria1.
- Exclusion filters are applied based on broad ESG standards and approaches adopted by institutional and private investors to exclude companies breaching Global Standards Principles2 and companies with involvement in controversial activities (specific product involvement in Tobacco, Small Arms, Controversial Weapons, Military Contracting Weapons, Thermal Coal, Oil Sands, Shale Energy, Arctic Oil & Gas, Oil & Gas and Power Generation) according to Sustainalytics’ data3.
- An additional filter is applied to companies based on their Sustainalytics Subindustry ESG Risk Rating percentile ranking4.
- Eligible companies are ranked based on their Sustainalytics ESG ratings. The first 20 are selected and are free-float market capitalisation weighted in the BEL® ESG Index5.
The composition of the index will be revised on a quarterly basis. The governance of the index will be aligned with the BEL Family rules.
