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September 5, 2008

Top Ethical Investing Indices: A Global Overview

by Ron Robins, MBA*

From my globally popular and respected ethical investing website, Investing for theSoul

The growth of ethical stock and bond indices around the world has been exciting andrapid in recent years. There is hardly a continent where they are not represented.

Investors everywhere want to make good returns by doing good. Many mutual funds,

unit trusts, and exchange traded funds (ETFs), are now based on these indices.

The performance of any particular index generally depends on the popularity of the

sectors represented within it. The attention on climate change benefits the green-sustainability sector which has a narrow focus on green technology and alternative

energy. The socially responsible-ethical indices are more diversified and often follow

larger stock market trends. They usually have little exposure to commodities andextractive industries, and tend to be heavily weighted in technology, health, financeand consumer goods. (A review of the articles on our Ethical Investing

Studies/Research page might be helpful in understanding the composition andperformance of these indices and associated funds.)

Here is a brief description, with links, to what I believe are the most prominent ofthese indices. Information and performance of funds associated with an index can

usually be found on its website.

Green-Sustainability Indices:

ACT Australian Cleantech Index (Australia)"The ACT Australian Cleantech Index provides a measure of the performance of the

Australian listed stocks in the Cleantech sector."

FTSE Environmental Technology Index Series (U.K.)

"FTSE Group has launched the FTSE Environmental Technology Index Series incollaboration with the environmental technology specialist, Impax Asset

Management, to provide two new environmental technology index solutions: theFTSE ET50 Index and FTSE Environmental Opportunities All-Share Index."

Impax ET50 (U.K.)

The Impax ET50 is a stock index of companies whose core business involves

environmental technologies.

NASDAQ Clean Edge U.S. Liquid Series Index (CELS) (U.S.A.)

"The NASDAQ Clean Edge U.S. Liquid Series Index (CELS) is a modified marketcapitalization-weighted index designed to track the performance of companies that

are primarily manufacturers, developers, distributors, or installers of clean-energytechnologies."
http://investingforthesoul.com/Main%20Pages/ron_robins_mba.htmhttp://investingforthesoul.com/http://investingforthesoul.com/http://investingforthesoul.com/Main%20Pages/ethical-investing-CSR-research-studies.htmhttp://investingforthesoul.com/Main%20Pages/ethical-investing-CSR-research-studies.htmhttp://www.auscleantech.com.au/Pages/cleantech.htmlhttp://www.ftse.com/Indices/FTSE_Environmental_Technology_Index_Series/index.jsphttp://www.impax.co.uk/asset/et50.htmhttp://quotes.nasdaq.com/quote.dll?mode=stock&page=multi&symbol=CELS&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symhttp://investingforthesoul.com/http://investingforthesoul.com/http://investingforthesoul.com/Main%20Pages/ethical-investing-CSR-research-studies.htmhttp://investingforthesoul.com/Main%20Pages/ethical-investing-CSR-research-studies.htmhttp://www.auscleantech.com.au/Pages/cleantech.htmlhttp://www.ftse.com/Indices/FTSE_Environmental_Technology_Index_Series/index.jsphttp://www.impax.co.uk/asset/et50.htmhttp://quotes.nasdaq.com/quote.dll?mode=stock&page=multi&symbol=CELS&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symhttp://investingforthesoul.com/Main%20Pages/ron_robins_mba.htm


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The Renaissance Green IPO Index (U.S.A.)"The Renaissance Green IPO Index captures the performance of newly public

companies whose products and services offer solutions to environmental problems."

WilderHill New Energy Global Innovation Index (U.K. & U.S.A.)"The WilderHill New Energy Global Innovation Index is comprised of companies

worldwide whose innovative technologies and services focus on generation and useof cleaner energy, conservation and efficiency, and advancing renewable energygenerally."

WilderHill Clean Energy Index (U.S.A.)WilderHill Clean Energy Index is an American Stock Exchange based index, "...

comprised of publicly traded companies whose businesses stand to benefitsubstantially from societal transition toward the use of cleaner energy and

conservation."

Socially Responsible-Ethically Focused Indices:

Bovespa ISE (Brazil)"ISE is designed to measure the return on a portfolio composed of shares ofcompanies highly committed to social responsibility... corporate sustainability...

good practices in the Brazilian corporate environment."

Calvert Social Index (U.S.A.)"... the Calvert Social IndexTM, as a broad-based, rigorously constructed benchmark

for measuring the performance of US-based socially responsible companies."

Domini 400 Social Index (U.S.A.)

"... KLDs Domini 400 SocialSM Index (DS400) is a float-adjusted marketcapitalization weighted common stock index modeled on the S&P 500 Index."

Dow Jones Sustainability Indices (Global)Dow Jones Sustainability Indices are North American and global socially and

environmentally screened stock indices.

FTSE4Good Index Series (Global)

Financial Times of London share indices of socially and environmentally screenedfirms. Indices range from individual countries to specific industrial sectors.

India Islamic Index (India)"The Eastwind Capital Advisors Pvt Ltd., the Indo-Arab Economic Forum and Institute

of Objective Studies launched the EW India Islamic Index... comprises only ofShariah compliant companies equity and excludes companies engaged in alcohol

products, pork-related products, conventional financial services like banking andinsurance, gambling, hotels and all other business which the Shariah supervisory

board considers as unethical."

Jantzi Social Index (JSI) (Can.)

The Jantzi Social Index is a Canadian socially and environmentally screened shareindex.
http://www.ipohome.com/Index/Green/GreenIndex.aspxhttp://www.nexindex.com/http://www.amex.com/?href=/othProd/prodInf/OpPiIndComp.jsp?Product_Symbol=ECOhttp://www.bovespa.com.br/Market/MarketIndexes/ise_i.shtmlhttp://www.calvert.com/sri_815.htmlhttp://www.kld.com/indexes/ds400index/index.htmlhttp://www.sustainability-index.com/http://www.ftse.com/Indices/FTSE4Good_Index_Series/index.jsphttp://www.thehindubusinessline.com/2008/06/26/stories/2008062652091600.htmhttp://www.jantzisocialindex.com/http://www.ipohome.com/Index/Green/GreenIndex.aspxhttp://www.nexindex.com/http://www.amex.com/?href=/othProd/prodInf/OpPiIndComp.jsp?Product_Symbol=ECOhttp://www.bovespa.com.br/Market/MarketIndexes/ise_i.shtmlhttp://www.calvert.com/sri_815.htmlhttp://www.kld.com/indexes/ds400index/index.htmlhttp://www.sustainability-index.com/http://www.ftse.com/Indices/FTSE4Good_Index_Series/index.jsphttp://www.thehindubusinessline.com/2008/06/26/stories/2008062652091600.htmhttp://www.jantzisocialindex.com/


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JSE SRI Index (South Africa)"The JSEs Socially Responsible Investment (SRI) Index was launched in May 2004

in response to the burgeoning debate around sustainability globally and particularlyin the South African context."

KLD Broad Market Social Index (U.S.A.)

"The KLD Broad Market SocialSM Index (BMS)... capturing the best environmental,social and governance (ESG) performers in each sector of the Russell 3000...represents 98% of the capitalization of the US equity market."

KLD U.S. Corporate Bond (USCB) Index (U.S.A.)"The [KLD U.S. Corporate Bond] investable indexes are the first to apply

environmental, social and governance (ESG) performance factors to a U.S. fixedincome asset class."(I have included here a separate KLD link as this class of index,

an ESG corporate bond index, is the first of its kind in the US.)

LOHAS Index (U.S.A.)

"LOHAS is an acronym for Lifestyles of Health and Sustainability. [Companies in this

index] practice 'responsible capitalism' by providing goods and services usingeconomic and environmentally sustainable business practices."There are threeindices: the LOHAS Index, Healthy Living Index, and Sustainable Economy Index.

S&P ESG India (India)"The S&P ESG India index provides investors with exposure to a liquid and tradable

index of 50 of the best performing stocks in the Indian market as measured byenvironmental, social, and governance parameters."

S RI Index Malaysia & Singapore SRI Index (Malaysia)"OWW Consulting launched the Responsibility SRI Index Series which aims to

identify companies in Malaysia and Singapore with good CSR (or Economic, Socialand Governance, ESG) reporting... "

From the above it is clear that ethical investors can now invest globally and be welldiversified. Many more ethically-based indices are likely in the years ahead.

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*Ron Robins, MBA, is founder, Investing for the Soul,

(http://investingforthesoul.com/), He advocates, writes and teaches on the subjectof ethical investing. To contact him, e-mail to Ron Robins or call 705-635-3034.

Ron Robins, 2008. Provided full credit, which includes title, my name, and link to this post is given, anyonemay print or re-produce this article in part, or in full, to any relevant web page.
http://www.jse.co.za/sri/http://www.kld.com/indexes/bmsindex/index.htmlhttp://www.marketwatch.com/news/story/kld-ryan-alm-mergent-launch/story.aspx?guid=%7B8856E5ED-D0F7-4E32-8760-BD0E69004326%7D&dist=hpprhttp://www.lohas.com/weekly/stockcharts/http://www2.standardandpoors.com/portal/site/sp/en/us/page.topic/indices_esgindia/2,3,4,0,0,0,0,0,0,0,0,0,0,0,0,0.htmlhttp://www.sri-asia.com/products/sri-index-sg.htmlhttp://investingforthesoul.com/Main%20Pages/ron_robins_mba.htmhttp://investingforthesoul.com/mailto:[email protected]://www.jse.co.za/sri/http://www.kld.com/indexes/bmsindex/index.htmlhttp://www.marketwatch.com/news/story/kld-ryan-alm-mergent-launch/story.aspx?guid=%7B8856E5ED-D0F7-4E32-8760-BD0E69004326%7D&dist=hpprhttp://www.lohas.com/weekly/stockcharts/http://www2.standardandpoors.com/portal/site/sp/en/us/page.topic/indices_esgindia/2,3,4,0,0,0,0,0,0,0,0,0,0,0,0,0.htmlhttp://www.sri-asia.com/products/sri-index-sg.htmlhttp://investingforthesoul.com/Main%20Pages/ron_robins_mba.htmhttp://investingforthesoul.com/mailto:[email protected]

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