Barclays expands ethical investment options for Gulf clients

Barclays has announced the launch of its two licensed Stoxx ESG (Environmental, Social and Governance) indices in the Middle East
Barclays expands ethical investment options for Gulf clients
The launch of the two indices also enables Barclays to meet a growing demand for equity investments driven by ESG criteria.
By Sam Bridge
Sat 15 Dec 2018 01:25 AM

Barclays has announced the launch of its two licensed Stoxx ESG (Environmental, Social and Governance) indices in the Middle East.

The Euro iStoxx 50 ESG Focus Index and Euro iStoxx 50 ESG Focus GR Decrement 5% Index will provide Barclays’ private banking clients with a wider pool of responsible investment options to build their portfolios from, the bank said in a statement.

The launch of the two indices also enables Barclays to meet a growing demand for equity investments driven by ESG criteria, while simultaneously helping clients with tailor made solutions, it added.

Barclays said the indices’ transparent design makes them particularly attractive for structured products while offering a simple alternative to the Eurostoxx 50 benchmark.

Steve Klemme, head of Middle East and North Africa, Barclays Private Bank and Overseas Services, said: "Barclays own CSR activities reflect a wider trend in this region for more responsible business practices.

"The same is being reflected in investors’ portfolios, with many seeing ESG-based products as a more stable long-term option. These indices help satisfy this growing demand while providing the assurance of a transparent and simplistic structure.”

He added: “This offering will help clients to access investment opportunities that are aligned with their return objectives and risk appetite while rewarding companies and organisations that rank highest in terms of Environmental, Social and Governance scores.”

The new indices are derived from the Eurostoxx 50, and will overweigh companies that rank the highest for ESG scores as set by the Sustainalytics rating model - a leader in ESG and corporate governance research and ratings.

The index organises companies into buckets of 10, ranked from the highest scoring to the least. A weighting scheme is distributed across the five buckets to overweight the best scorers, which ensures the index emphasizes the most responsible companies.

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