March 30, 2022

Integrating ESG into core Japanese benchmarks

With strong global sustainable investment asset growth, investors are increasingly taking steps to integrate ESG into core investment benchmarks and therefore are looking for those that incorporate ESG philosophy and reflect a wide range of market exposures. The FTSE Japan Blossom Sector Relative Index uses a sector-relative approach to reduce the deviation from the base index and identify a company's relative ESG Scores in the business sector. The index also aims to address the climate transition by incorporating climate risk management criteria from the perspective of management quality. FTSE Russell's index methodology helps incorporate ESG into investment strategies while using corporate disclosures and transparent methodologies. Scores and index calculation methodologies provide clear standards for companies' ESG compliance, support understanding and dialogue across the investment chain and help support stewardship activities in investors' investment activities.