FTSE Russell has launched the FTSE MIB ESG Risk-Adjusted Index. The new index will adjust for ESG and carbon risks within the universe by tilting away from companies with fossil fuel reserves and carbon emissions and tilting towards companies with higher ESG scores.

The index will incorporate a range of exclusions, focusing on controversial weapons, tobacco, thermal coal (extraction and energy generation), oil sands, shale energy, and Arctic exploration. Companies that potentially breach the United Nations Global Compact principles are also excluded.

Stephanie Maier, head of sustainable at FTSE Russell commented: “Increasingly, investors are seeking products that provide a simple alternative to flagship market cap benchmarks with a greater emphasis on ESG risks to complement more focused sustainable strategies. This launch is in response to growing customer demand and will provide investors with a tool to access equity market exposure whilst also reducing exposure to key ESG risks.”

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