Solactive, ISS, Morgan Stanley partner to launch future of plastic index

On the 02/08/21 at 11:38AM


Adrien Paredes-Vanheule

The index launch is a response to plastic waste becoming a growing investment theme.

German index provider Solactive, data provider ISS ESG and US financial group Morgan Stanley on Monday launched the Solactive ISS ESG Future of Plastic Index. The index holds 50 equally-weighted global companies that are outperforming peers in innovation and implementation of plastic waste solutions and efficient material use.

The index's underlying methodology was developed by Morgan Stanley from ISS ESG's data. Starting with the Solactive GBS Developed Markets Large & Mid Cap Index universe, the Solactive ISS ESG Future of Plastic Index puts aside companies with low liquidity, major environmental, social, or governance (ESG) risks, and companies with ties to products contributing to marine ecosystem degradation, such as microbeads or significant single-use plastic packaging.

Eligible companies are ranked through a proprietary plastic waste solutions score. According to a statement, the score determines the “50 leaders” and reflects corporate involvement in recycling solutions and practices, use of recycled content, efficient use of raw materials, extension of useful product life, and/or developing alternatives to single-use and micro-plastics. 

Besides, the index applies some ESG screening assessment relying on data from ISS ESG. Companies failing to comply with established gender or racial discrimination norms are therefore excluded as well as companies involved in certain sectors (controversial weapons R&D, coal mining and other activities causing significant envrionmental harm). In addition to that, eligible companies have to showcase a robust plan to avoid substantial negative impacts on marine ecosystems. “Plastic waste has become one of humanity’s greatest challenges. According to the WWF, individuals could consume five grams of microplastic per week, on a global average – the equivalent of one credit card,” said Axel Haus, team head qualitative research at Solactive.

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