We’ve partnered with MSCI ESG Research, a leading provider of environmental, social and governance (ESG) data, to develop the Bloomberg Barclays MSCI ESG Fixed Income Indices, the market’s first fixed income index family to incorporate measures of ESG risk.
Four ESG investment themes
The index family was designed to meet the needs of a diverse community of ESG investors, pursuing a wide variety of objectives ranging from values alignment to full ESG integration. Our core ESG fixed income family includes three broad ESG methodologies: Socially Responsible (SRI), Sustainable, and ESG-weighted. Additionally, we offer a family of Green Bond indices for climate-focused and impact investors.
Bloomberg Barclays MSCI Socially Responsible (SRI) Indices
SRI indices exclude issuers from existing Bloomberg Barclays indices that are involved in business lines or activities in conflict with investment policies, values or social norms. Investors may also create customized exclusions. In 2017, investors commonly requested the exclusion of controversial weapons (including biological weapons, landmines, and cluster bomb munitions).
Bloomberg Barclays MSCI Sustainability Indices
Sustainability indices include only best-in-class MSCI ESG rated issuers. The indices apply a positive screen on existing Bloomberg Barclays Indices based on MSCI ESG ratings, including only issuers who are best managing their ESG risks. Several U.S. fixed income funds were newly launched in 2017 using this sustainability methodology.
Bloomberg Barclays MSCI ESG-Weighted Indices
ESG-weighted indices use MSCI ESG ratings and MSCI ESG ratings momentum (change in rating level over 12 months) to re-weight issuers within an existing Bloomberg Barclays parent index. The growing usage of ESG-weighted indices in 2017 was a clear sign that the fixed income investor base is becoming more sophisticated in their ESG usage.
Bloomberg Barclays MSCI Green Bond Indices
Green Bond indices offer investors an objective and robust measure of global green bond issuance. Green bonds are fixed income securities issued to fund projects with direct environmental benefits, and are classified by their designated use-of-proceeds. An independent, research-driven methodology is used to evaluate index-eligibility of green bonds. This ensures the bonds adhere to established Green Bond Principles.