We start by discussing what motivates investors to enter the sustainability field (section 11.2). We debate different reasons for their engagement, ranging from concerns for securing competitive returns to changes in the regulatory landscape and client demand. Next, we discuss how ESG factors are integrated into different asset classes. We first discuss how ESG considerations are integrated into equity investing (section 11.3). We then look at other ways to consider ESG-related information in investment decisions, focusing on impact investing and fixed income (section 11.4). Section 11.5 looks at how investors that already have invested in companies can improve these firms’ ESG performance, either via active engagement and dialogue or via voting on shareholder resolutions. Next, we discuss what different kinds of data can shape investors’ consideration of sustainability issues (section 11.6). Finally, we look at the new European legislation (Sustainable Finance Disclosure Regulation, SFDR) which requires investors to disclose the level of sustainability risks and adverse sustainability impacts associated with their investment decisions.

Far from their image as a boring technical tool of the financial world, indexes are becoming a critical lever for investors to raise market-wide standards and to catalyse sustainable corporate business models. Investors can choose from a wide spectrum of benchmarks to suit their precise needs. The rise of benchmarks and passive investments, then ‘smart beta’ and now the emergence of ‘smart sustainability’ has been a global phenomenon, and the stage is now set for their powerful application in active ownership strategies.