The Abu Dhabi Securities Exchange (ADX) has launched its inaugural Environmental, Social, and Governance (ESG) benchmark index, the FTSE ADX ESG Screened Index, in collaboration with FTSE Russell, as reported by Reuters on November 28. This development precedes the COP28 summit and signifies a significant move towards promoting sustainable investment practices in the region. The index, designed to be transparent and tradable, ranks companies based on their ESG scores derived from screening criteria and a comprehensive methodology. Aligned with the UAE government’s “Towards the next 50” agenda for building a sustainable economy, the ADX ESG index aims to encourage sustainable business practices among listed companies and attract greater investments into responsible entities. It will initially include 24 companies listed on the ADX market and constituents of the FTSE ADX General Index. The ESG performance will be measured annually, considering factors such as emissions, environmental product innovation, human rights, and shareholder practices.

ADX has a history of supporting ESG and sustainability initiatives, including playing a crucial role in establishing unified ESG disclosure metrics for GCC listed companies. The exchange’s comprehensive ESG disclosure guidance aligns with the World Federation of Exchanges and the United Nations Sustainable Stock Exchanges initiative. ADX also launched its first annual Sustainability Report in 2020 and actively participates in initiatives such as the Abu Dhabi Sustainable Finance Declaration.

Sources:

https://www.reuters.com/sustainability/abu-dhabi-stock-exchange-launches-esg-benchmark-index-2023-11-28/

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