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.
Why trade ESG index CFDs with City Index?
- Invest in companies that make a positive impact through ESG
- Diversify your investment portfolio
- Fully licensed and regulated by the Monetary Authority of Singapore (MAS)
- Trade the top 100 ESG companies in the US without taking multiple equity positions
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 cover a wide range of sectors. Trading the index is similar to trading wider indices such as the Dow Jones or the FTSE 100, in the knowledge 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.
Trade the ESG index today with a trusted Singaporean broker.
What's the difference between the ESG index and the Green 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.
Meanwhile, the Green index focuses on the companies that have an interest in environmentally friendly alternative-energy sources and other environmental efforts as their key feature.
Learn more about the Green index.