How Indexing Works for Carbon Markets
How are innovative indices tracking compliance and voluntary carbon futures markets bringing greater transparency to the energy transition? S&P DJI’s Jim Wiederhold and KraneShares’ Luke Oliver discuss how first-to-market benchmarks are democratizing access to global carbon markets.
- Categories Commodities, ESG
- Tags alternative investments, carbon futures markets, carbon markets, commodities, compliance carbon markets, energy transition, ESG, global voluntary carbon futures markets, indexing carbon markets, Jim Wiederhold, KraneShares, Luke Oliver, S&P Dow Jones Indices, S&P GSCI Global Voluntary Carbon Liquidity Weighted, voluntary carbon markets
- Categories
- Commodities, ESG
- Tags
- alternative investments, carbon futures markets, carbon markets, commodities, compliance carbon markets, energy transition, ESG, global voluntary carbon futures markets, indexing carbon markets, Jim Wiederhold, KraneShares, Luke Oliver, S&P Dow Jones Indices, S&P GSCI Global Voluntary Carbon Liquidity Weighted, voluntary carbon markets
S&P ESG High Yield Dividend Aristocrats Index – Adding a Layer of Sustainability via ESG Screening
High-dividend-yielding stocks have been prevalent in 2022, as rising interest rates have put downward pressure on long duration assets. At the same time, market participants are increasingly seeking to align investments with their personal and societal values. The S&P ESG High Yield Dividend Aristocrats® Index may be a strategy that checks both of these boxes….
Measuring Board Gender Diversity across S&P ESG Indices
According to numerous studies,1 having a gender-diverse board is a key indicator of good corporate governance.2 The gender diversity of a board of an investee company is also one of the mandatory sustainability indicators3 that financial market participants are required to assess and report on under the EU’s Sustainable Finance Disclosure Regulation (SFDR).4 Using the…
Reversing the Entropy of Climate Change
According to the second law of thermodynamics, the state of disorder or chaos of a system, also known as entropy, increases over time, defining the so-called arrow of time. Applying this analogy to Earth, is the world headed into chaos as climate change unfolds? Not necessarily. Just as entropy can decrease if useful work is…
Amid the Energy Rally, Tracking ESG Bond Index Performance
Year-to-date, global stock and bond market returns have been mired in red. The picture has been consistent across the various bond and equity sectors, except for Energy and Utilities stocks, posting YTD returns of 48.8% and 5.5%, respectively. Before this Energy rally, the iBoxx MSCI ESG Advanced USD Liquid Investment Grade (IG) Index was launched…
S&P 500 Decarbonization: Drawing the Path to Net Zero
As reported in S&P DJI’s Climate and ESG Index Dashboard, climate indices can include both absolute and benchmark-relative goals. Absolute goals could include, for example, a certain target level of weighted average emissions among index constituents, while a relative goal might insist on an improvement in comparison to a benchmark such as the S&P 500®….
How to Bring Paris Agreement Goals to Fixed Income Indices
This blog was co-authored by Smadar Shulman and Paulina Lichwa-Garcia. As the transition to net zero is becoming a critical consideration in portfolio management, the popularity of indices that incorporate the EU’s minimum standards for Climate Transition Benchmarks (CTBs) and Paris-aligned Benchmarks (PABs) has been gathering pace. Such benchmarks aim to select securities that are collectively…
- Categories ESG, Fixed Income
- Tags climate, CTB, decarbonization, ESG, EU Climate Transition Benchmark, fixed income, green bonds, greenhouse gas, iBoxx EUR Corporates Net Zero 2050 Paris-Aligned ESG, Net Zero, PAB, Paris Agreement, Paris-aligned Benchmark, S&P PACT, S&P PACT Fixed Income, Sustainalytics
- Categories
- ESG, Fixed Income
Net Zero: Time Is of the Essence
This blog was co-authored by Reid Steadman and Fred Samama. At Glasgow’s COP26, banks, insurers and investors representing USD 130 trillion in private capital made a historic commitment through the Glasgow Financial Alliance for Net Zero (GFANZ) to achieve net zero emissions by 2050 at the latest,1 mirroring government pledges. The question remains how to…
Clean Energy Demand Fueled by Inflation Reduction Act
On Aug. 16, 2022, President Joe Biden signed the Inflation Reduction Act into law, which includes the largest ever climate-related investment by the U.S. federal government. Devoting USD 370 billion to climate and energy programs, the act commits the U.S. to a roughly 40% emissions reduction by 2030. This landmark bill is the latest example…
Using Indices to Help Align ESG Goals and Values
Take a closer look at the importance of index construction and underlying data across the ESG spectrum with S&P DJI’s Ben Leale-Green.
