NEW YORK–S&P Dow Jones Indices (“S&P DJI”), the world’s leading index provider, launched a new series of indices designed to represent real estate companies with a strong track record of sustainability performance.
The index series is an extension of the Dow Jones Select Real Estate Securities Indices (RESI) and utilizes data from GRESB – a leader in evaluating Environmental, Social and Governance (ESG) characteristics of real estate companies.
At launch, the series consists of the following indices:
Dow Jones U.S. Green REIT Index
Dow Jones Global Green RESI
Dow Jones Global ex-U.S. RESI
Dow Jones Japan Green RESI.
Each index consists of all the constituents in the relevant regional Dow Jones Select RESI. Constituent weights are adjusted based on the individual company’s sustainability performance as measured by GRESB with higher scoring companies receiving increased weights. Companies ranked below the 50th percentile in sustainability will have their index weight reduced by 30 percent with the additional weight reallocated on a pro-rata basis to the companies ranked in the top 25 percent.
As the leading independent index provider, S&P Dow Jones Indices offers a full array of indices to meet any investment strategy. Increasingly, investors are making ESG factors a bigger part of those strategies. With a significant amount of global carbon emissions being driven by the construction and operation of buildings, real estate is a particular industry of focus among ESG investors.
“Real estate investors have historically lacked a simple tool to integrate ESG performance into their investment process,” said Michael Orzano, senior director of Global Equity Indices at S&P Dow Jones Indices. “These indices close that gap by providing a solution that allows market participants to identify companies with strong sustainability performance while retaining the investment characteristics and risk profiles of our conventional real estate benchmarks.”
“GRESB exists to respond to investor demand for standardized and validated ESG performance on their real asset investments. The ESG data used for this new series of indices emerges from the GRESB Real Estate Assessment, the global standard for ESG benchmarking and reporting for the institutional real estate sector and will serve investors looking to incorporate ESG factors into their investment decisions,” said Sander Paul van Tongeren, Co-founder and Managing Director at GRESB.
S&P Dow Jones Indices is the largest global resource for essential index-based concepts, data and research, and home to iconic financial market indicators, such as the S&P 500® and the Dow Jones Industrial Average®. More assets are invested in products based on our indices than products based on indices from any other provider in the world. Since Charles Dow invented the first index in 1884, S&P DJI has been innovating and developing indices across the spectrum of asset classes helping to define the way investors measure and trade the markets.
S&P Dow Jones Indices is a division of S&P Global (NYSE: SPGI), which provides essential intelligence for individuals, companies, and governments to make decisions with confidence. For more information, visit www.spdji.com.
GRESB is the environmental, social and governance (ESG) benchmark for real assets. Working in collaboration with the industry, GRESB defines the global standard for sustainability performance in real assets, providing standardized and validated ESG data to the capital markets.
More than 80 institutional investors, collectively representing over USD 18 trillion in institutional capital, use GRESB data and analytical tools. In 2018 a record 903 property companies and funds participated in the GRESB Real Estate Assessment, the Infrastructure Assessment covered 75 funds and 280 assets, and 25 portfolios completed the Debt Assessment.