JPMorgan collaborates with BlackRock to launch J.P. Morgan ESG index

By Sarah Lizee

Olympia, Wash., April 18 – JPMorgan Chase & Co. announced that it collaborated with BlackRock to launch a new suite of global fixed income indexes, the J.P. Morgan ESG index (JESG), which integrates environmental, social and governance factors in a composite benchmark.

The company said the index was created to address growing demand from bond investors looking for a benchmark that targets emerging market issuers with strong ESG practices.

“The new index is independently managed by JPMorgan and will cater to investors looking to gradually incorporate ESG and responsible investing in their overall fixed-income investment strategies by anchoring its methodology around the bank’s widely used flagship indices,” according to a press release.

The initial JESG is available for the EMBI Global Diversified, GBI-EM Global Diversified and CEMBI Broad Diversified.

There are five components in the JESG methodology once the baseline index is selected: define the data inputs; establish JESG index scores; apply integration mechanics; consider ethical factors and exclusion; and calculate new ESG weights.

The newly calculated JESG index scores will be systematically applied to determine the new ESG weights in the index, and issuers with better ESG scores will have their weights increased relative to their baseline index weights, the release said. The JESG suite will also overweight green bond issuances.

JPMorgan is a financial services holding company based in New York.

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