Citi launches ESG World Indices to act as ESG benchmarks

Citi has launched a new equity benchmark index family which places Environmental, Social and Governance (ESG) considerations and opportunities at its core.

The Citi ESG World Indices are Citi’s first proprietary indexes to offer a benchmark for best-in-class ESG performers from across global markets.

The indexes use ESG ratings provided by Arabesque, a leading ESG data and analytics company. Unlike other ESG index approaches – which typically embed negative screening methodologies to reduce exposure to ESG risks such as those arising from controversial activities – the Citi ESG World Indices adopts negative screening and also incorporate a differentiated, best-in-class approach, identifying the best performers in terms of ESG metrics.

“We consistently develop new ways to bring innovative and topical index solutions to our global client base,” says Michele Cancelli, Global Head of Citi Investment Strategies Trading and Structuring. “The Citi ESG World Index family represents exposure to a theme which is at the forefront of many investors’ minds. In addition to showcasing Citi’s strong index construction capabilities, these indices also highlight our ability to collaborate with market leading platforms, such as Arabesque, to support our aim of delivering best-in-class solutions to investors.”

Citi developed the Indices after many client conversations around the globe. The Indices embed a quantitative analysis of ESG considerations through the use of Arabesque’s data. The result is a globally diverse equity index family, which is rules-based and which provides a benchmark for the next wave of ESG-focused thematics.

“This launch represents the next step forward in the ESG-related solutions that Citi can bring to financial markets. It demonstrates our commitment to innovation and championing the next generation of solutions in this field for a wide array of clients,” says Elree Winnett-Seelig, Global Head of ESG for Markets and Securities Services.

Citi has developed extensive capabilities to support clients’ increasing interest in sustainability and ESG. From asset identification, to product development and design, and showcasing thematic insights and expertise, Citi is well-positioned to work with clients to support their ESG objectives.

Harlin Singh, Head of Sustainable Investing for Citi Private Bank, says: “2020’s events accelerated interest in ESG across the private wealth landscape: from family offices to foundations, and non-profits to individuals. Our clients have told us they are seeking differentiated opportunities that move beyond simple negative screening and strategies which aim to capture outperformance as a result of their ESG attributes.”

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