Did COP26 deliver?
This piece originally appeared on Risk.net. The dust has now settled on the 2021 UN Climate Change Conference (COP26). Did the gathering of almost 200 nations succeed in putting us on a path towards limiting warming to 1.5°C? COP26 concluded with the signing of the Glasgow Pact, which agreed to “keep 1.5°C alive.” Some of…
Resilience to Rising Carbon Prices: Do Eurozone S&P PACT Indices Stand the Test?
“Code red for humanity.” That’s how the imminent effects of climate change were described by the UN.1 Human-induced global warming stands at 1.1°C above pre-industrial levels, and will likely reach more than 2.7°C by 2100.2 If the world is to achieve the goals of the Paris Agreement and limit global warming to 1.5°C, decarbonization is…
- Categories ESG, Thematics
- Tags carbon prices, ESG, eurozone, PACT, Paris Agreement, S&P PACT Indices, sustainability, Trucost
Can Equal Weight ESG Indices Pull Their Weight?
Research has shown that equally weighted indices have historically posted long-term outperformance1 over their benchmarks—largely driven by their exposures to small size and value along with associated risk premia, in addition to a healthy dose of concentration reduction.2 However, in accessing compensated factors and reducing concentration, the S&P 500® Equal Weight Index could elicit some…
Why COP Matters to Everyone
1.5°C, net zero emissions, COP, Glasgow, Paris, carbon offsets, stranded assets… Or… as Greta might say “blah blah blah.”1 With so much information, it’s easy to tune out to the noise of climate change. From the heatwaves of California,2 to the climate protesters in London,3 to the floods in Bangladesh,4 climate change is affecting everyone….
Net Zero Index Strategies for Developed Markets
The S&P PACTTM Indices (S&P Paris-Aligned & Climate Transition Indices) comprise the S&P Climate Transition (CT) Indices and the more ambitious S&P Paris-Aligned (PA) Indices. These indices are intended to meet the EU’s minimum standards for EU Climate Transition benchmarks and EU Paris-aligned benchmarks under the Regulation (EU) 2016/1011 (EU Benchmark Regulation). The indices follow…
Navigating Climate Risk with Indices
How can indices bring greater transparency to climate risk? Designed to go beyond the requirements of EU Low Carbon Benchmark minimum standards, the S&P Paris-Aligned & Climate Transition Indices were created to help market participants looking to chart a path to net zero by 2050.
S&P Global Clean Energy Index: A Path toward Greater Transparency
In April 2021, the S&P Global Clean Energy Index underwent changes to reduce constituent concentration, ease liquidity limitations, and improve index replication. The total number of constituents rose, and the weighting scheme was modified. As a provider of choice, S&P DJI also launched a focused index, the S&P Global Clean Energy Select Index, which consists…
Boston Marathon Can Teach Us about the S&P 500 ESG Index Methodology
Today is the 125th Boston Marathon—a big day in the world of distance running. Organized by the Boston Athletic Association (BAA), it is perhaps the pre-eminent annual event on the global marathon calendar. The 20,000 runners in today’s race were selected in May 2021, around the same time S&P DJI rebalanced the constituents of the…
- Categories ESG, Thematics
- Tags Canada FA, ESG. Boston Marathon, S&P 500 ESG Index, sustainability, US FA
Understanding the Basics of Sustainability Part 2: Focusing on Net Zero
The increasing focus on sustainability inclusion is being reflected through the markets’ growing recognition of the financial materiality and impact of ESG issues on corporate balance sheets. Therefore, the range of ESG offerings has expanded to include indices that focus on climate change, carbon efficiency, fossil fuel free, and thematics, which include clean energy and…
- Categories ESG, India, Thematics
- Tags Carbon Emissions, ESG, India, Net Zero, S&P BSE 100 ESG Index, sustainability
Tilting Toward Sustainability with the S&P/NZX 50 Portfolio ESG Tilted Index
As they begin their journey in environmental, social, and governance (ESG) investing, many market participants are realizing that there are multiple ways in which an index methodology can incorporate ESG characteristics. Some strategies will look to screen out particular industry groups or companies participating in various business activities, while other strategies will make relative adjustments…
