The German benchmark index DAX® has a new, sustainable family member: the DAX® 50 ESG Index, which was launched today. This index takes environmental, social and governance (ESG) criteria into account and highlights the 50 top companies regarding their ESG performance, market capitalisation and stock exchange turnover. It was created by Qontigo, the index and analytics business of Deutsche Börse Group.
“The demand for sustainable indices among investors has been growing for years. That is why we have decided to launch an ESG-DAX index, which meets the same high standards as its name sponsor,” said Stephan Flägel, Global Head of Indices & Benchmarks at Qontigo. “The index reflects ESG criteria to which institutional and private investors today are equally committed. We are convinced: DAX 50 ESG will be the standard for ESG investments in Germany.”
The starting point for the DAX 50 ESG Index is the HDAX which includes approximately 100 components (HDAX is made up of DAX, MDAX and TecDAX). In creating the index, norm-based exclusion criteria are applied in accordance with the UN Global Compact Principles, and also product involvement screening for controversial weapons, tobacco, coal, nuclear power and military contracts. The remaining stocks are ranked according to market capitalisation, stock exchange turnover and ESG scores calculated by Sustainalytics, a leading global provider of ESG research, ratings and data. From this list, the top 50 stocks are selected for the index. The index is reviewed every three months. DAX fast-exit and fast-entry rules apply including any sustainability breaches by the index constituents.
“As part of our Group-wide commitment to Sustainable Finance, transparency and the availability of sustainability data play a crucial role. ESG aspects allow a more holistic and, above all, future-oriented assessment of a company’s value. This is because climate and environmental risks, social factors and aspects of corporate governance will play an essential role for the financial sector in risk assessment,” said Kristina Jeromin, Head of Group Sustainability at Deutsche Börse. “The real economy is facing a transformation process and it is the responsibility of the financial sector to finance it; indices such as the DAX 50 ESG provide an important basis for this.”
As a provider of market infrastructure, Deutsche Börse sees its fundamental responsibility in ensuring transparency in the capital markets and thereby promoting stability and the economic success of these markets. Providing sustainable products and services is just as important as conducting a constructive dialogue on the sustainable development of the international capital markets with customers and society as a whole.
DAX®, MDAX®, TecDAX®, HDAX® and DAX® 50 ESG are registered trademarks of Qontigo GmbH.
