As our focus on passive investing and index funds has become mainstream, many investors struggle to implement their ESG-policy when invested in ETFs and other index funds. The problem is that when you invest in an index fund you invest in all the companies in the index, including the ones you do not want to invest in.
In 2014 we started offering ESG-neutralisation to institutional investors as a way to overcome this problem. We first calculate the indirect look-through exposure of the whole investment portfolio and then create an ESG-overlay to neutralise the exposure to the controversial companies.
ESG-neutralisation is offered to institutional investors as a stand-alone service or as a part of an asset allocation service. It can be customised to meet the client's own exclusion list.