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Tag Archives: decarbonization

Jan 11, 2023

Results from the Recent S&P 500 Net Zero 2050 Paris-Aligned Sustainability Screened Index Rebalance

The author would like to thank Clara Arganaraz, Index Manager of the S&P 500® Net Zero 2050 Paris-Aligned Sustainability Screened Index, for her contributions to this post. S&P Dow Jones Indices recently completed the rebalancing of all indices that aim to meet the minimum requirements for EU Climate Transition and EU Paris-Aligned Benchmarks.1 This includes…

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Nov 15, 2022

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…

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Oct 11, 2022

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®….

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Sep 27, 2022

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…

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Sep 6, 2022

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…

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Jul 28, 2022

Schrödinger’s Carbon: Intensity and Paris Alignment

In quantum mechanics, Schrödinger’s Cat refers to the paradoxical consequences of a thought experiment: can a cat be simultaneously dead and alive? A similarly counterintuitive phenomenon can be found in the context of climate-based analysis: whereby an index may boast a relatively low carbon intensity and yet, perhaps surprisingly, not be judged as aligned with…

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Jun 23, 2022

Data Driving the Weights within the S&P 500 Net Zero 2050 Paris-Aligned ESG Index

The World Meteorological Organization estimates that there is a 50% chance that global warming will exceed 1.5°C before 2026.1 The International Panel on Climate Change has warned that time is running out—climate change is no longer a problem for the future, and its associated physical risks are materializing more evidently.2 The world may need to…

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Mar 30, 2022

S&P PACT Indices Target Sector Neutrality

Recently announced results for a consultation on the S&P PACT™ Indices (S&P Paris-Aligned & Climate Transition Indices) reveal that they will now target country and sector neutrality. This has the potential benefit of comparing companies, as much as possible, to close peers (those in the same sector and country), while reducing active risk. The EU’s…

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May 5, 2020

Business as Usual for the S&P Paris-Aligned Climate Indices

On April 20, 2020, the S&P Eurozone LargeMidCap Paris-Aligned Climate Index (S&P Eurozone PA Climate Index) was launched (see press release). This index has been designed to align with recommendations from the Task Force on Climate-related Financial Disclosures and follow the new minimum standards for EU Paris-Aligned Benchmarks proposed by the EU,[1] while remaining as…

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Mar 10, 2020

The S&P Eurozone Paris-Aligned Climate Index Concept: Implementing the Proposed EU Climate Benchmark Regulation

Introduction In January 2020, S&P Dow Jones Indices (S&P DJI) released a paper for the S&P Eurozone Paris-Aligned Climate Index Concept (PAC Concept).  The PAC Concept conceptualizes the proposals of the EU Technical Expert Group on Sustainable Finance (TEG), as published in its Final Report on Climate Benchmarks and Benchmarks’ ESG Disclosure dated September 2019,[1]…

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