Trade the ESG index

Take a position on Environmental, Social & Governance (ESG) stocks:

  • Trade the top 100 ESG companies in the US
  • Index ranked and weighted according to ESG rating
  • Margins as low as 5%
  • Go long or short
  • Spreads from 6 pts
Trade the ESG index

Quick facts

This index features the top ESG stocks listed in the US, with a weighting scheme based on each company’s ESG score, as assessed by their Arabesque S-Ray main score. Typically, no featured stock is awarded a weighting in excess of 1.13% or below 0.855%.

The index is revised quarterly on the third Friday of every March, June, September and December after market close.

  • Number of constituents: 100
  • Market hours: 23:30 – 06:00 AEST
  • Spread: Fixed (6 points)

How companies qualify for ESG index status

Companies with a strong environmental commitment – be it climate change policies, greenhouse gas emission goals or carbon footprint – could find themselves featured on this index.

The social component of ESG involves people-related elements, such as company culture and issues that impact employees, customers, consumers, suppliers, the local community, and society at large.

Finally, a company with good corporate governance is judged as one with a strong board of directors who relate well to different stakeholders, run their business effectively, and align the management team's incentives with the company's success.

NEWS & ANALYSIS

How to trade the ESG index

The 100 different companies listed in our ESG index cover a wide range of sectors. Trading the index is similar to trading wider indices such as the NYSE or the FTSE, in the knowledge you’re trading ethically sound stocks.

In the simplest terms, if you felt that US stocks on a general basis were overpriced, you could consider going short (or sell) on the ESG index, while if you felt a bull run was imminent you could go long (or buy) the index.

However, a major German research project in 2015 found that 62.6% of various studies indicated a positive relationship between the implementation of ESG policies by a company and its financial performance. Only 10% of the studies found a negative relationship.

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