Why Boardwalk Capital is Creating its Own Sustainability Indexes

Consistency matters. 

Earlier this month, many of Europe’s leading resource companies and financial institutions were unceremoniously dumped from the STOXX European Sustainability Indices.  Needless to say, some investors were left scratching their heads.

Did dozens of European companies suddenly become less "sustainable"?  Not necessarily.

Prominent firms such as Anglo American, Total, ENI, and Repsol were among the newly-excluded resource and energy companies. Other notable deletions include Barclays and Standard Chartered (banks), Munich Re (insurance), BASF, AstraZeneca, Diageo and British American Tobacco. 

What prompted such a drastic change?   The unfortunate answer is that newly-hired index manager, Bank Sarasin, essentially has a different view of the world and what it means to be "sustainable".  New rules, new index...

In contrast, the Boardwalk Sustainability Indexes are driven by in-house research derived from mosaic of globally-recognized external research partners.  And since we implement customized portfolios based on these indexes, we recognize that unnecessary trading is expensive and detracts from client portfolio returns. 

We expect indexes to change constituents based on new information.  But changes driven by administrative matters are unacceptable.