How SustIDX approaches research
SustIDX uses a rules-based research framework designed to keep evidence, investment signals, sustainability considerations and portfolio decisions distinct and traceable. Each input has a defined role, and the effect of assumptions and constraints should remain visible in the final result.
1. Define the universe
Start with a clearly defined group of eligible securities based on the purpose of the analysis or index. Eligibility rules and exclusions are set before securities are ranked or weighted.
2. Assess evidence and materiality
Use dated market, financial and sustainability information, with attention to relevance, comparability and when the information became available. Sustainability data is treated according to its purpose rather than collapsed automatically into a single score.
Two distinct, purpose-built layers sit on top of this evidence base. Sustainability Signals is the base, broad-coverage layer — nine topic families scored from real, sourced evidence across the covered universe, with its full formulas and sources published. Causal Ecology is a separate, deeper overlay: a proprietary methodology that traces ecosystem dependency, ecological condition and — where the evidence supports it — causal contribution for the specific mechanisms — freshwater, land and biodiversity — that a broad topic-family score isn't built to resolve at facility-level causal specificity. Neither layer modifies the other, and neither is presented as, or intended to substitute for, a generic public ESG rating. Causal Ecology's public page covers its concepts, evidence standards and limitations; the detailed scoring specification is part of SustIdx's proprietary technical methodology, available under institutional/research access — see the Causal Ecology overview for how to request it.
3. Build and test signals
Transform relevant information into interpretable signals and test whether they add distinct information. Related measures are checked for overlap so repeated versions of the same underlying exposure do not dominate the result.
4. Construct the portfolio
Translate the research into portfolio weights using the methodology specified for each index. Risk, liquidity, turnover, diversification and sustainability objectives are considered where relevant.
5. Validate the result
Evaluate historical performance, risk, benchmark-relative behaviour and sensitivity to key assumptions. Where a methodology relies on forecasts or optimisation, uncertainty and implementation constraints are made explicit.
6. Explain and document
Show why securities were included, excluded or weighted as they were, identify the assumptions that matter, and document the data and methodology version used to produce the result.
Data and limitations
SustIDX uses documented market, company and sustainability sources. Historical analysis aims to use information available at the relevant decision date where practicable. Data coverage and quality vary by source, and known limitations are documented alongside the research.
Detailed data sources, methodology specifications and known limitations are available in the technical documentation, alongside the full source and methodology change history on GitHub.