Taiwan’s Bureau of Labor Funds (BLF) has chosen a new environment, social and governance (ESG) index developed by UK-based FTSE Russell and Taiwan Index Plus Corp (TIP) as the benchmark for its US$1.4 billion passive mandate.

BLF is the first Taiwanese pension fund to use the FTSE4Good TIP Taiwan ESG Index, which was launched in December, to benchmark a mandate, according to FTSE Russell.

BLF awarded the five-year mandate last year to four asset managers, including BlackRock and Northern Trust.

An increasing number of Asian institutional investors are integrating ESG considerations into their passive strategies. Last year, Japan’s Government Pension Investment Fund selected the FTSE Blossom Japan Index as a core ESG benchmark. The index tracks Japanese companies that meet clear and transparent standards.

Jessie Pak, managing director, Asia at FTSE Russell, declares that the company is “delighted to be working with the Taiwan Bureau of Labor Funds to support them in integrating ESG considerations into their investment strategies”.

“Our recently launched FTSE4Good TIP Taiwan ESG index supports the growing demand for sustainable investment and globally recognised ESG standards in the domestic Taiwanese market,” Ms. Pak says in a statement. “This important new FTSE Russell passive ESG allocation builds on our strong momentum and track record in this area.”

The FTSE4Good TIP Taiwan ESG Index tracks companies listed on the Taiwan Stock Exchange that meet globally recognised ESG inclusion standards used by the FTSE4Good Index Series.

According to TIP President and Chief Executive Officer Billy Wang, institutional investors in Taiwan are “placing priority in embracing sustainable investment performance and disclosure”.

TIP is a wholly-owned subsidiary of the Taiwan Stock Exchange.

“Taiwan Bureau of Labor Funds, as the leading national public pension fund, was not only the first to endorse the stewardship code in Taiwan but is also the first to select the FTSE4Good TIP Taiwan ESG Index as a core ESG benchmark. This further recognises the growing importance of sustainable investing in Taiwan,” Mr. Wang says.

BLF had total AUM of NT$3.62 trillion ($124.4 billion) at the end of 2017.

Source: Asia Asset Management