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Bloomberg, MSCI expand ESG index suite into China bond market
Sustainability criteria becoming increasingly vital to institutions investing or operating in the country
The Asset 20 Sep 2022

Bloomberg and MSCI have unveiled their first index suite that tracks the performance of the renminbi-denominated and US dollar-denominated Chinese bond markets, while incorporating ESG and socially responsible investment (SRI) considerations.

The Bloomberg MSCI China ESG Index Suite includes the following three flagship ESG index variants based on the Bloomberg China Aggregate Index, Liquid China Credit Index, and China USD Credit Index:

  • Bloomberg MSCI China ESG-Weighted Indices: utilizing MSCI ESG ratings and MSCI ESG ratings momentum, to tilt issuer market weights.
  • Bloomberg MSCI China SRI Indices: designed to exclude issuers with substantial revenue derived from sources such as alcohol, tobacco, controversial military weapons, nuclear power, and genetically modified organisms.
  • Bloomberg MSCI China Sustainability Indices: applies a positive screen based on MSCI ESG ratings, including only issuers with BB and above ESG ratings, excluding controversy “red” issuers.

“We are delighted to expand our ESG index offerings to meet the needs of investors who are looking to increase exposure in China’s bond market, as we continue to advance index solutions for use in the sustainable investment space around the world,” says Ji Zhuang, APAC head of indices at Bloomberg.

“As more investors use ESG data and tools to support their investment decisions, ESG criteria have become increasingly vital to China and international institutions investing or operating in the country,” adds Douglas Walls, APAC head of index products at MSCI.

The Bloomberg MSCI China ESG index family is an expansion of the Bloomberg MSCI ESG Fixed Income Index suite, which includes a range of investment-grade aggregate, corporate index and multi-currency, high-yield benchmarks for investors who are aiming to incorporate ESG considerations into their strategic asset allocation.

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