FTSE and KLD join forces on sustainability indexes


Two leading sustainability index providers – the FTSE Group and KLD Indexes – have entered into a strategic partnership which will include a rebranding exercise early next year.

With the exception of the FTSE4Good index family, all the FTSE and KLD indexes in the sustainability space will be relaunched early in 2009 under the ‘FTSE KLD’ banner.

Peter Kinder, president of Boston-based KLD, called the partnership “a milestone for the practice of socially responsible investing and ESG [environment, social and governance] investment worldwide”. The financial details of the deal were not disclosed.

Jerry Moskowitz, New York-based president of FTSE Americas, told Environmental Finance that the FTSE Group will take over responsibility for managing the KLD indexes, with KLD focusing on ESG research which will help underpin all the indexes.

He said few changes will be made to KLD’s index methodologies, as they are “pretty close already to the FTSE methodologies” – however, eventually the two companies are likely to produce a “standard set of rules” to apply to all the indexes.

Over the course of 2009, the two companies will carry out a review of their offerings, which is expected to lead to the launch of additional indexes, Moskowitz added.

He said that KLD’s strong base in the US will complement FTSE’s presence in European sustainability indexes.

Last year, the FTSE Group entered into an agreement with Impax Asset Management, relaunching the UK-based environmental investment manager’s Impax ET50 index as the FTSE ET50.

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