Environmental, social & governance index banner image

Take a position on the ESG index

Trade environmental, social & governance (ESG) stocks using CFDs with a regulated broker.

  • Trade with margins as low as 10%
  • Go long or short
  • Spreads from 6 pts


What is the ESG Index?

The ESG Index features the top environmental, social & governance stocks listed in the US. The index has a weighting scheme based on each company’s ESG score, as assessed by their Arabesque S-Ray main score, a data tool that filters detailed ESG information for all major stock indices. Typically, no featured stock is awarded a weighting in excess of 1.13% or below 0.855%.

The index is revised quarterly on the third Friday of every March, June, September and December, after market close.

Number of constituents:
1
Market hours:
23 –06.00 AEST
Spread:
20 pts

Why trade ESG Index CFDs with City Index?

  • Invest in companies that make a positive impact through ESG
  • Diversify your investment portfolio
  • Regulated in Australia since 2006
  • Trade the top 100 ESG companies in the US

How companies qualify for ESG index status

Companies with a strong environmental commitment – be it climate change policies, greenhouse gas emission goals or carbon footprint – could find themselves featured on this index.

The social component of ESG involves people-related elements, such as company culture and issues that impact employees, customers, consumers, suppliers, the local community, and society at large.

Finally, a company with good corporate governance is judged as one with a strong board of directors who relate well to different stakeholders, run their business effectively, and align the management team's incentives with the company's success.

How to trade the ESG Index

The 100 different companies listed in our ESG index covers a wide range of sectors. Trading the index is like trading wider indices such as the Australia 200 or the Germany 40, but you know you’re trading ethically sound stocks.

In the simplest terms, if you felt that US stocks on a general basis were overpriced, you could consider going short (or sell) on the ESG index, while if you felt a bull run was imminent you could go long (or buy) the index.

A major German research project by DWS Group in 2015 found that 62.6% of various studies indicated a positive relationship between the implementation of ESG policies by a company and its financial performance. Only 10% of the studies found a negative relationship.

Trade the ESG Index today with a trusted Australian broker.

What's the difference between the Green index and the ESG index?

Whilst there is much environmental crossover between ESG and green focused companies, the main difference between them is that companies with ESG aims tend to drill down into human aspects including social policies, diversity, and workers' treatment.

The green index focuses on the companies that have a prime interest environmentally friendly alternative-energy sources and other environmental efforts as their key feature.