Euronext has launched the CAC SBT 1.5° index, which will invest solely in companies within the SBF 120 Index – the 120 most actively-traded stocks listed in Paris – that have emissions reduction targets approved to be in line with the 1.5°C goal of the Paris Agreement.
The pan-European stock exchange and market infrastructure provider, which introduced its CAC 40 ESG Index in March 2021, said the new benchmark looks to respond to the growing demand for sustainable investment tools.
The index is designed to facilitate the adoption of mainstream environment, social and governance (ESG) investment approaches by institutional and private investors while providing a strong focus on climate change considerations.
It incorporates negative screening and norm-based exclusion filters applied in accordance with the UN Global Compact Principles, as well as exclusion screening for companies involved in unconventional oil & gas, coal, controversial weapons and tobacco activities.
It is composed of companies that have defined clear targets to reduce greenhouse gas (GHG) emissions in line with 1.5°C, which have been validated by the Science Based Targets initiative (SBTi).
Emissions reduction targets approved by the SBTi represent the gold standard for corporate climate goals.
The index’s methodology will evolve to integrate new EU regulations and standards as they emerge. Components of the index are free-float market capitalisation weighted and the composition will be revised on a quarterly basis.
Through the 2015 Paris Agreement, world governments committed to limiting the global temperature rise to well-below 2°C above pre-industrial levels and pursuing efforts to limit warming to 1.5°C.
“The Euronext CAC SBT 1.5 index follows the stock performance of companies who have set clear and measurable targets to reduce greenhouse gas emissions, validated by the Science Based Target initiative,” said Stéphane Boujnah, CEO and chairman of the Managing Board of Euronext N.V.
He added, “The launch of this index is a strong signal of the transition towards responsible investment. As part of the ‘Fit for 1.5’ commitment in our Growth for Impact 2024 strategy,
Euronext is playing a crucial role in empowering sustainable finance across all its markets and in supporting the allocation of capital to sustainable initiatives through the launch and publication of ESG indices.”
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