Queens’ College Cambridge has launched and adopted an MSCI custom global equity index that includes ESG-screened companies and excludes extractive and carbon-intensive industries.
The College writes that it is, in part, responding to vociferous debate with students around complete divestment from carbon-intensive industries.
The MSCI ACWI SRI ex Energy ex Materials ex Utilities Index includes companies from the MSCI SRI Index universe, and excludes the Energy, Materials and Utilities sectors.
The College writes that adoption of indexes that integrate ESG criteria is a growing trend in the UK as asset owners take greater interest in governance issues and tighten control over asset manager mandates. The Index has been adopted as a benchmark for the endowment’s equity investments with effect from June 30, 2018.
Elston Consulting worked with the Investment Committee to respond to the concerns of the divestment lobby without losing sight of primary investment objectives.
Jonathan Spence, Bursar for Queens’ College Cambridge, says: “While investment outcomes are our primary focus, social responsibility and ethical considerations have a key role to play for an institution like ours. If there’s a way of having a robust diversified investment strategy whilst factoring in those concerns, then that’s the best of both worlds.”
Henry Cobbe, CFA, Head of Research at Elston Consulting, says: “We are delighted to support asset owners like Queens’ College develop innovative solutions using MSCI indexes. As well as an interesting challenge from an investment perspective, this is also about improving dialogue between asset owners and other key stakeholders as regards good outcomes.”
Deborah Yang, Head of Index, EMEA, at MSCI, says: “An increasing number of investors are integrating ESG considerations into their investment process, and chose to do so via an index for transparency. We were pleased to collaborate with Elston Consulting to build a custom index for Queens’ College Cambridge.”
