(NYSE: MSCI), a leading provider of global equity indexes, said Chinese A-shares will be included in the MSCI Emerging Markets Index and MSCI Global Index in June next year.
MSCI will conduct an environmental, social and governance (ESG) study and rating of all the listed companies included in its indexes.
More than 200 A-share companies to be included in the MSCI indexes will be subject to ESG ratings by more international investors.
[HKG:6863] saw stock plunge 85 percent on March 24 this year, wiping HKD30 billion (USD3.84 billion) off the company’s market value.
These cases exemplify the importance of incorporating ESG into investment strategies as institutions can avoid or remove companies that exhibit high risks in their portfolios to achieve higher risk-adjusted returns, Linda-Eling Lee, global head and executive director of MSCI’s ESG Research group, said recently.