Scientific Beta

IPE: "However, Goltz says that index providers need to explain that sustainability criteria might alter financial risks of an index or dilute the original sustainability objectives. They should identify such issues and help investors navigate the trade-offs between competing objectives in index design."

IPE October 2024

"(...) Although he believes custom-made standalone ESG indices for equities and bonds will continue to gain traction, Felix Goltz, research director at Scientific Beta, also sees growing demand for a combination of quantitative strategies with an ESG overlay. (...) However, Goltz says that index providers need to explain that sustainability criteria might alter financial risks of an index or dilute the original sustainability objectives. They should identify such issues and help investors navigate the trade-offs between competing objectives in index design. “This is why it is crucial for index providers to assess the robustness of specifications and apply a rigorous research framework when developing these indices,” he adds. (...)"