Triodos, STOXX Launch New Impact Investing Index
Impact investment management firm Triodos Investment Management and market index provider STOXX announce the launch of the iSTOXX Triodos Developed Markets Impact Index, enabling institutional investors to construct impact-aligned portfolios.
According to the companies, the new index was designed to serve as a benchmark for institutional investors looking to integrate positive and measurable sustainability and social impact into their investment approach, while minimizing the negative impact of their investments.
The objective of the new index is to track the performance of companies that contribute positively to society and the environment, while excluding those that fail to meet strict ethical and sustainability standards. The benchmark, utilizing the STOXX Developed World All Cap as its investment universe, focuses on companies demonstrating strong commitments to ESG factors, and promoting positive change in areas such as climate action, social justice, responsible governance, and ethical business practices, while screening out companies involved in activities including fossil fuels, tobacco, weapons manufacturing.
Triodos and STOXX said that the new index comes as impact investing has gained traction in the institutional investor space in recent years, yet a lack of benchmarks has created challenges for investors, with existing sustainable benchmarks typically not taking positive or negative impact into account.
William de Vries, Director Impact Equities and Bonds at Triodos IM, said:
“The iSTOXX Triodos Developed Markets Impact Index aims to be the leading broad impact benchmark, not only enabling institutional investors to effectively steer on impact but also to allocate their investments to specific UN Sustainable Development Goals (SDGs). It also allows us to emphasize specific investment themes when constructing portfolios for our institutional clients.”
Axel Lomholt, General Manager at STOXX, added:
“As a leading provider of innovative custom index solutions, we are delighted to partner with Triodos Investment Management in creating this first-of-kind custom-built impact benchmark. The iSTOXX Triodos Developed Markets Impact Index provides Triodos IM institutional investor clients with new opportunities to align their portfolios with their specific impact and SDG themes.”