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Tadawul to introduce environmental index with MSCI

Tadawul to introduce environmental index with MSCI
The index will include not less than 70 Saudi listed companies

Riyadh – Mubasher: The Saudi Stock Exchange (Tadawul) considers introducing an environmental, social or governance (ESG) index in collaboration with the global index provider MSCI by the fourth quarter (Q4) of 2020 or Q1-21, Reuters reported quoting the bourse’s CEO, Khalid Al Hussan, as saying.

The index will include not less than 70 Saudi listed companies and will be based on MSCI standards. Moreover, Tadawul plans to issue ESG guidelines for Saudi listed corporates in Q4 of the year.

“Globally we understand that ESG is becoming an investment requirement and we don’t want to be behind this in the Saudi market,” the CEO said.

Tadawul is the world’s ninth-largest stock market, with a market capitalisation of $2.5 trillion, thanks in part to Saudi Aramco's initial public offering (IPO) in 2019. It is ranked after the London Stock Exchange and ahead of Canada’s Toronto Stock Exchange.

In 2019, the Saudi market joined the FTSE Emerging All Cap Index and the MSCI Emerging Markets Index, driving more foreign fund inflows.