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S&P Dow Jones Indices launches new ESG index series
Sustainability criteria incorporated into Dividend Aristocrats Index family
27 Apr 2021 | The Asset

Index provider S&P Dow Jones Indices has launched sustainable versions of its widely followed Dividend Aristocrats family of indices representing multiple geographies. Each of the indices measures the dividend yield-weighted performance of companies from its underlying parent index that meet specific environmental, social and governance (ESG) criteria and have followed a managed-dividends policy for a specified number of years.

The five new indices are: S&P Developed ESG Dividend Aristocrats Index, S&P ESG High Yield Dividend Aristocrats Index, S&P Global ESG Dividend Aristocrats Index, S&P Global ESG Dividend Aristocrats Quality Income Index, and S&P Euro ESG High Yield Dividend Aristocrats Index.

“Dividend payments are often viewed as an important barometer of companies’ financial health and outlooks. Market participants closely monitor companies’ long-term dividend payment track records as indicators of corporate maturity and balance-sheet strength. Investors also often utilize dividend-based strategies to help manage risks and returns especially in bearish and volatile market conditions,” explains Aye Soe, global head of product management at S&P Dow Jones Indices.

To determine constituent eligibility, the S&P ESG Dividend Aristocrats Indices utilize S&P Global’s ESG scores. The indices apply additional screens and exclude companies that are involved in specific business activities, including those that are not aligned with the principles of the United Nations’ Global Compact, and those that are involved in ESG controversies.

“S&P Dow Jones Indices is proud to offer ESG versions of many of our most well-known and respected benchmarks such as our Dividend Aristocrats and flagship US equities index family. The S&P ESG Dividend Aristocrats Indices include a layer of sustainability screens, reflecting the market’s growing recognition of the financial materiality and impact of ESG issues on corporate balance sheets,” says Reid Steadman, global head of ESG indices at S&P Dow Jones Indices.