RepRisk provides Fast Exit feature of S&P 500 ESG Exclusions II Index, which was used to develop SPDR S&P 500 ESG Screened UCITS ETF by State Street Global Advisors
# December 2019
RepRisk, a pioneer in ESG data science that leverages the combination of AI and machine learning with human intelligence to systematically analyze public information and identify material ESG risk, is pleased to announce their collaboration with S&P Dow Jones Indices on the State Street launch of the SPDR S&P 500 ESG Screened UCITS ETF.
Earlier this week, State Street Global Advisors (SSGA) has launched an S&P 500 ETF that screens for ESG ETF has been developed using the S&P 500 ESG Exclusions II Index, with transparent methodology and a Fast Exit feature based on RepRisk ESG risk data that allows investors to react quickly to breaking or critical issues and material risks facing the company or listing, and which may translate into financial, reputational, or compliance risk.
The S&P 500 ESG Exclusions II Index shares similar rules, sector composition, and methodology (including the same transparent free-float market-cap weighting scheme) as the S&P 500 Index, which is a broad US equity index containing the largest and most frequently traded equity securities. RepRisk played a key role in developing the index's Fast Exit feature, which regularly evaluates listed companies and flags those who violate the RepRisk Index's treshold of 60. The RepRisk Index (RRI) 1 is a proprietary algorithm that dynamically quantifies a company's ESG risk exposure. Once a company is found to be in violation of the Index threshold, the impacted listing will be removed within two business days' notice on a best effort basis from when S&P Dow Jones Indices is notified of the violation.
A company removed as a risk will only be considered for addition to the index on any future rebalancing date if its RRI score is below 70 for all days since the previous rebalancing date. Non-constituents may not be added to the index if their RRI has reached 70 or above any day since the previous rebalancing date.
Dr. Philipp Aeby, CEO of RepRisk added: "As a pioneer in ESG data science, we leverage the combination of AI and machine learning with human intelligence to systematically analyze public information and identify material ESG risks. Our heightened awareness of the materiality such risks have informed our research methodology and subsequently the RepRisk Index to create meaningful and actionable data that expedites an investor's reactions to specific ESG risk incidents. Through our partnership with S&P DJI, we are making tremendous strides to advance ESG risk criteria for deploying more impactful passive investment strategies, and for creating improved data and transparency that will drive better decision-making and address today's global challenges."
Please find below a selection of media coverage on the SPDR S&P 500 ESG Screened UCITS ETF:
Citywire Selector - State Street launches ETF that screens S&P 500 for ESG exclusions
ETF Express - State Street Global Advisors launches SPDR S&P 500 ESG Screened UCITS ETF