Index Methodology

MSCI Global ex
Tobacco Involvement
Indexes Methodology
August 2024

© 2024 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document.

MSCI Global ex Tobacco Involvement Indexes Methodology | August 2024

Contents
1.

Introduction .......................................................................................................... 32.

Constructing the MSCI Global ex Tobacco Involvement Indexes ........................... 4

3.

4.

2.1

Underlying Universe ................................................................................................. 4

2.2

Screening Criteria ..................................................................................................... 4

Maintaining the the MSCI Global ex Tobacco Involvement Indexes ....................... 5
3.1

Index Reviews ........................................................................................................... 5

3.2

Ongoing Event-Related Maintenance ..................................................................... 5

3.2.1

IPOS and Other Early Inclusions ...................................................................... 5

3.2.2

Additions and Deletions Due to Corporate Events ........................................ 5

MSCI ESG Research .............................................................................................. 6
4.1

MSCI ESG Business Involvement Screening Research ......................................... 6

Appendix I: Methodology Set ....................................................................................... 7
Appendix II: Changes to this Document ........................................................................ 8© 2024 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document.

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MSCI Global ex Tobacco Involvement Indexes Methodology | August 2024

1.

Introduction
The MSCI Global ex Tobacco Involvement Indexes (the ‘Indexes’) have been developed for use byinstitutional investors, including pension funds, and universal owners who wish to avoid investments
in companies involved in the tobacco business.
These indexes are free float‐adjusted market capitalization weighted.1

1 The Indexes are governed by a set of methodology and policy documents (“Methodology Set”), including the present index

methodology document. Please refer to Appendix I for more details© 2024 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document.

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MSCI Global ex Tobacco Involvement Indexes Methodology | August 20242.

Constructing the Indexes

2.1

Underlying Universe
The selection universe for the Indexes is defined by the constituents of the MSCI Global Investable
Market Indexes (GIMI).

2.2

Screening Criteria
The Indexes use company research provided by MSCI ESG Research2 to determine eligibility forindex inclusion. In particular, the indexes use MSCI ESG Business Involvement Screening Research
to identify companies that are involved in the tobacco business.
Companies that meet the following business involvement criteria are excluded from the Indexes:•

2.3

Tobacco-All companies classified as a “Producer”-

All companies deriving 5% or more aggregate revenue from the production, distribution,
retail, supply and licensing of tobacco-related products.

Treatment of Unrated Companies
Companies not assessed by MSCI ESG Research on MSCI ESG Business Involvement Screening
Research data are not eligible for inclusion in the Indexes if they are classified in the following Global
Industry Classification Standard (GICS®)3 Industry Groups: Capital Goods, Materials, Food, Beverage& Tobacco, Consumer Staples Distribution & Retail, Consumer Discretionary Distribution & Retail andTransportation.

2 See section 4 for further information regarding ESG and climate data used in the Indexes that MSCI Limited and MSCI DeutschlandGmbH source from MSCI ESG Research LLC, a separate subsidiary of MSCI Inc. MSCI ESG Research is solely responsible for thecreation, determination and management of such data as a provider to MSCI Limited and MSCI Deutschland GmbH. MSCI Limited
and MSCI Deutschland GmbH are the benchmark administrators for the MSCI indexes.
3 GICS is the global industry classification standard jointly developed by MSCI and S&P Global Market Intelligence.

© 2024 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document.

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MSCI Global ex Tobacco Involvement Indexes Methodology | August 2024

3.

Maintaining the Indexes

3.1

Index Reviews
The Indexes are reviewed on a quarterly basis to coincide with the Index Reviews of the MSCI Global
Investable Market Indexes. The changes are implemented as of the close of the last business day of
February, May, August and November. At index reviews, all companies in the underlying universe arereviewed and eligible companies are added to the Indexes. Existing constituents may be deleted
from the Indexes if they become involved in tobacco and are screened according to the criteria
described in Section 2. Any constituent that is deleted from the Parent Index as a result of an index
review is also deleted from the Indexes.
The pro forma Indexes are generally announced nine business days before the index review effective
date.
In general, MSCI uses MSCI ESG Research data4 (MSCI Business Involvement Screening Research)
as of the end of the month preceding the Index Reviews for the rebalancing of the Indexes. For somesecurities, such data may not be published by MSCI ESG Research by the end of the month
preceding the Index Review. For such securities, MSCI will use ESG data published after the end ofmonth, when available, for the rebalancing of the Indexes.

3.2

Ongoing Event-Related Maintenance
The MSCI Corporate Events Methodology is applied for the maintenance of the Indexes between
index reviews

3.2.1 IPOS and Other Early Inclusions
IPOs and other newly listed securities that are added to the Parent Index as well as securities added
to the Parent Index following a migration from a different size-segment, will be considered forinclusion in the Indexes at the next index review according to the rules outlined in Section 2.

3.2.2 Additions and Deletions Due to Corporate Events
Deletions from the Parent Index following a corporate event will be simultaneously deleted from theIndexes. Additions to the Parent Index following corporate events related to existing constituents(such as spin-offs) will not be automatically added to the Indexes. These Parent Index additions will
be considered for addition at the next index review according to the rules outlined in Section 2.
There are no deletions from the Indexes between index reviews on account of a security becoming
involved in the tobacco business.

4 See section 4 for details of data sourced from MSCI ESG Research used in the Indexes.

© 2024 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document.

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MSCI Global ex Tobacco Involvement Indexes Methodology | August 2024

4.

MSCI ESG Research
The Indexes are products of MSCI Inc. that utilize information such as company ratings andresearch produced and provided by MSCI ESG Research LLC (MSCI ESG Research), a subsidiary of
MSCI Inc. In particular, the Index uses the following MSCI ESG Research product: MSCI ESG
Business Involvement Screening Research. MSCI Indexes are administered by MSCI Limited and
MSCI Deutschland GmbH.

4.1

MSCI ESG Business Involvement Screening Research
MSCI ESG Business Involvement Screening Research (BISR) aims to enable institutional investors tomanage environmental, social and governance (ESG) standards and restrictions reliably andefficiently.
For more details on MSCI ESG Business Involvement Screening Research, please refer tohttps://www.msci.com/legal/disclosures/esg-disclosures.

© 2024 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document.

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MSCI Global ex Tobacco Involvement Indexes Methodology | August 2024

Appendix I: Methodology Set
The Indexes are governed by a set of methodology and policy documents (“Methodology Set”),
including the present index methodology document as mentioned below:• Description of methodology set –https://www.msci.com/index/methodology/latest/ReadMe•

MSCI Corporate Events Methodology –https://www.msci.com/index/methodology/latest/CE•

MSCI Fundamental Data Methodology –https://www.msci.com/index/methodology/latest/FundData•

MSCI Index Calculation Methodology –https://www.msci.com/index/methodology/latest/IndexCalc•

MSCI Index Glossary of Terms –https://www.msci.com/index/methodology/latest/IndexGlossary•

MSCI Index Policies – https://www.msci.com/index/methodology/latest/IndexPolicy•

MSCI Global Industry Classification Standard (GICS) Methodology –https://www.msci.com/index/methodology/latest/GICS•

MSCI Global Investable Market Indexes Methodology –https://www.msci.com/index/methodology/latest/GIMI•

ESG Factors In Methodology*

The Methodology Set for the Indexes can also be accessed from MSCI’s webpage
https://www.msci.com/index-methodology in the section ‘Search Methodology by Index Name orIndex Code’.
* ‘ESG Factors in Methodology’ contains the list of environmental, social, and governance factors
considered, and how they are applied in the methodology (e.g., selection, weighting or exclusion). It
can be accessed in the Methodology Set as described above.

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MSCI Global ex Tobacco Involvement Indexes Methodology | August 2024

Appendix II: Changes to this Document
The following sections have been updated as of September 2018:
Section 3.2: Screening Criteria•

Clarified the screening criteria for companies involved in Tobacco

The following sections have been updated as of June 2023:•

Methodology book was updated to reflect the transition of the MSCI Global Investable
Market Indexes (GIMI) to Quarterly Comprehensive Index Reviews.

•

All references to “Semi-Annual Index Reviews” and “Quarterly Index Reviews” of the MSCIGIMI were replaced with “Index Reviews.”

Section 4: MSCI ESG Research•

Moved that section after the Section 3.

•

Updated the descriptions of MSCI ESG Research products.

The following sections have been updated as of August 2024
Section 2.3: Treatment of Unrated Companies•

New section detailing the treatment of companies when business involvement screening
research is not available from MSCI ESG Research

Section 4: ESG Research•

Updated with the latest descriptions and links

Appendix I: Methodology Set•

Added details on the Methodology Set for the Indexes© 2024 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document.

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MSCI Global ex Tobacco Involvement Indexes Methodology | August 2024

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