Global index provider FTSE Russell has introduced the FTSE MIB ESG Risk-Adjusted Index for investors seeking to manage ESG risks when investing in leading Italian stocks. According to the firm, the new benchmark will provide users with improved index-level ESG performance, adjusting ESG and carbon risks, active industry weights and maximum stock weight with a low tracking error. It will tilt away from companies with fossil fuel reserves and carbon emissions and towards firms with higher ESG scores. The index will incorporate a range of exclusions, focusing on controversial weapons, tobacco, thermal coal, oil sands, shale energy, and Arctic exploration. Firms that potentially breach the UN Global Compact principles are also excluded. “Increasingly, investors are seeking products that provide a simple alternative to flagship market cap benchmarks with a greater emphasis on ESG risks to complement more focused sustainable strategies,” said Stephanie Maier, Head of Sustainable at FTSE Russell. “This launch is in response to growing customer demand and will provide investors with a tool to access equity market exposure whilst also reducing exposure to key ESG risks.” FTSE Russell said the new index, part of a family launched in April 2023, would provide investors with broad exposure to the Italian stock market, while improving the ESG and climate risk characteristics of their portfolio. The FTSE MIB is the benchmark stock market index for the Borsa Italiana, the Italian national stock exchange, owned by Euronext since it was divested by the London Stock Exchange Group (LSEG) to secure European regulatory approval for the acquisition of Refinitiv. FTSE Russell is wholly owned by LSEG.
