Passive investing and sustainability engagement were deemed at best challenging and at worst incompatible. Now, a growing realization acknowledges that combining index investing and sustainability engagement is not only possible but can reinforce and mobilize significant global assets under management (AUM) to enable collaborative engagement.
By linking engagement to transparent capital re-allocation, passive investing has the potential to influence and achieve changes in corporate practices and strategies, which produce real world impact.
This article explores the evolution of environmental, social and governance (ESG) engagement and passive investing, and demonstrates that sustainability index design can lead to scalable, efficient and impactful corporate engagement across entire markets. The use of such indexes to steer investment flows provides clear incentives for companies to improve sustainability performance and deliver outcomes sought by asset owners and society at large.
You can now read the full whitepaper at the link below