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Jun 19, 2019

FTSE Russell ESG data expansion boosts Australian small caps

Two hundred and fifty Australian listed companies will see coverage lift

Global index FTSE Russell has expanded its ESG data analysis to include small-cap firms, providing a coverage boost to 250 Australian listed companies, as they will now be included in FTSE Russell’s ESG coverage.

Australia has been one of the most vociferous markets in the Asia-Pacific region about the need to integrate ESG into investment practice, with 129 asset owners and asset managers signed up to the United Nations Principles for Responsible Investment.

This has allowed Australia to expand its local regulatory support of ESG commitments, with the Australian arm of the Financial Services Council launching a compulsory asset stewardship code for fund managers in 2017, and the Australian Council of Superannuation Investors’ launch of the Australian Asset Owner Stewardship Code in 2018.

David Harris, head of sustainable investment at FTSE Russell, says in a statement: ‘We are pleased to expand our coverage in the Australian market where sustainable investment is a priority for many customers.

‘By providing access to detailed, structured and transparent information on the ESG priorities and performance of Australian companies, [we can] help support investor stewardship and ESG integration into active and passive strategies.’

FTSE Russell’s ESG ratings and data aim to help investors understand a company’s exposure to, and management of, ESG issues in a number of ways.

The ESG ratings comprise an overall rating that breaks down into underlying pillar and theme exposures and scores, with the pillars and themes built on more than 300 individual indicator assessments that are applied to each company’s circumstances. Eligible companies are given an ESG rating ranging from 0 to 5.

Last year FTSE Russell launched the Stewardship, Transition and Engagement Program for Change to support better global standards in reporting and to help companies measure their own performance.