French boutique Ecofi Investissements has launched an SRI European equities index, Ecofi SRI Europe Index, which has been developed with Finvex group.
The index includes 33 firms with a process relying on three steps.
From a universe that comprises the 600 largest caps in Europe, 360 stocks presenting the best ESG performances according to Ecofi and not involved in scandals of corruption, pollution, money laundering, violation of human rights are selected.
Among other key points checked by the boutique for its selection remain quantitative indicators (eg. greenhouse gas emissions per MWh a year for electricians), balance of powers, rejection of tax havens by the firms, non-discrimination policy.
The selection then drops to 280 stocks which are the most liquid. Finvex’s filter requires a daily volume traded on the last six months exceeding €15m per trading session.
Lastly, the 33 stocks picked in the index are those offering the best risk return rates and ensuring a geographical as well as sectorial diversification within the index.
Laurent Vidal, head of Sales, Marketing and Communication at Ecofi Investissements, said the index is going forward Cop 21’s momentum as it not only includes the environmental criteria but also social and governance issues all companies must face. He added the index will measure more efficiently ESG impact on management and show that SRI can generate returns.
Ecofi Investissements had €8bn of assets under management as at 1 September 2015.