V-Square licenses new index for Australian ESG strategy

Global quant manager V-square has launched an MSCI Global Equity ESG Materiality and Carbon Transition Indexed Strategy for Australian investors.

The strategy tracks the MSCI All Country World Index (ACWI) ex-Australia ESG Materiality and Carbon Transition Select Special Tax Index.

The index has been licensed to V-square by MSCI and is designed to track sector leaders based on relevant key ESG issues that are aligned with the Sustainability Accounting Standards Board's (SASB) materiality map. That map is a visual representation of how 26 general sustainability issues manifest across 77 industries.

"MSCI ESG and Climate Indexes are designed to provide institutional investors with effective and transparent tools to facilitate integrating ESG and Climate considerations in their investment portfolios and align their benchmarks with their objectives," MSCI head of ANZ asset owner client coverage, Glen Gee, said.

V-Square's indexed strategy for Australian investors is currently offered with an unconstrained tracking error and the organisation plans to develop another version targeting a lower tracking error.

"We are thrilled to expand our investment solutions to the Australian market with an innovative strategy, focusing on the financial impacts of sustainability and accounting for current and potential exposure to climate change transition risks and opportunities," V-Square co-founder and president, Mamadou-Abou Sarr, said.