ESG in focus as Thomson Reuters launches Diversity & Inclusion index

Jonathan Boyd
ESG in focus as Thomson Reuters launches Diversity & Inclusion index

Thomson Reuters has launched a Diversity & Inclusion index that ranks 100 listed companies globally on measures of diversity and inclusion in the workplace, as part of its work supplying ESG data to investors measuring risk around ESG factors.

The D&I index measures 24 metrics across four categories: Diversity, Inclusion, People Development and News Controversies. Some 5,000 companies are measured, but only those with scores across all four categories achieve an overall score that helps set their ranking in the D&I index.

Debra Walton, chief product & content officer, Financial & Risk, Thomson Reuters, said that research pointed to companies with focus on ESG “can have a stronger stock performance and better long term profitability.”

Top 25 Index ranking and their corresponding overall D&I percentage score (%)

Roche Holding AG 82.50
Compagnie Generale des Etablissements Michelin SCA 81.50
Novartis AG 81.00
Johnson & Johnson 79.75
Astellas Pharma Inc 79.00
Contact Energy Ltd 79.00
Eli Lilly and Co 78.75
Colgate-Palmolive Co 78.00
Cisco Systems Inc 77.75
Fletcher Building Ltd 77.25
Diageo PLC 77.00
EDP Energias de Portugal SA 77.00
Kathmandu Holdings Ltd 76.75
Medtronic PLC 76.75
Nestle SA 76.75
Samsung Electronics Co Ltd 76.50
Allianz SE 76.25
Accenture PLC 75.75
L’Oreal SA 75.75
Natura Cosmeticos SA 75.75
Procter & Gamble Co 75.50
Kering SA 75.25
Microsoft Corp 75.25
LVMH Moet Hennessy Louis Vuitton SE 75.00
BASF SE 74.75

Europe’s biggest equity investor, Norway’s Pension Fund Global, reported a NOK return on equity investments of -6.11%, or -2.26% measured in international currency over the first six months of the year to 30 June, from its 9,000 investments in companies.

The fund is steered by a bias towards responsible investing from the starting point of using the FTSE Global All Cap index. Recently, in September 2016, the fund announced the exclusion of Duke Energy Corp, and the wholly-owned subsidiaries Duke Energy Carolinas LLC, Duke Energy Progress LLC, and Progress Energy Inc from the fund.

“The companies are excluded based on an assessment of the risk of severe environmental damage,” the fund said in a statement.

Last year the manager stated when it published its second annual responsible investment report that “We expect companies to address a broad set of long-term risks in their strategies, investment plans, risk management and reporting.”

“We updated our expectations with regard to children’s rights, water management and climate change in 2015, and today we are also publishing our expectations for how companies manage human rights. Monitoring environmental, social and governance risks in the portfolio is an important part of Norges Bank Investment Management’s work on responsible investment.”