Tag Archives: sustainability

Two Birds, One Stone: How the S&P Paris-Aligned Climate Index Concept Meets the Proposed EU Climate Benchmark Regulation and the Recommendations of the TCFD

As the world continues to pump the gas on a one-way street toward catastrophic climate change, market actors are attempting to slow down the traffic by limiting global temperature rise to within 1.5°C since pre-industrial levels.[1] To date, climate-conscious investors have largely focused on reducing relative portfolio carbon exposure. However, divergent methodologies make fertile ground Read more […]

The Rising Importance of ESG Data

The demand from investors for environment, social, and governance (ESG) data and ESG products has never been stronger. This has triggered a growing industry of ESG data providers in the market. It is vital for S&P Dow Jones Indices (S&P DJI), when choosing ESG data providers who drive our ESG solutions to work with market-leading Read more […]

Through the Turbulence, a New Breed of ESG Indices Delivers

Have the new beta-like ESG indices delivered on their objectives, notwithstanding the market turmoil? The answer is yes, and then some. The S&P 500® ESG Index has provided low tracking error relative to the S&P 500 and similar risk, but also a better return. For decades, growth in ESG investing was unremarkable, held back by Read more […]

The S&P Eurozone Paris-Aligned Climate Index Concept: A Greenwashing Minimization Approach to High Climate Impact Sector Neutrality

In January 2020, S&P Dow Jones Indices released a paper for the S&P Eurozone Paris-Aligned Climate Index Concept (PAC Concept). The PAC Concept aims to align with 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] Read more […]

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] Read more […]

S&P Dow Jones Indices Launches First Single-Commodity Carbon Emission Allowances Index

The S&P GSCI Carbon Emission Allowances (EUA) EUR represents an expansion of the single-commodity series of indices based on the S&P GSCI and is the first index of its kind in the market. The S&P GSCI Carbon Emission Allowances (EUA) EUR is designed to provide investors with a reliable and publicly available investment performance benchmark Read more […]

The S&P Eurozone Paris-Aligned Climate Index Concept Sensitivity Analysis: Decarbonization over Time

To meet the proposals for CTBs or PABs,[1]—as published by the EU Technical Expert Group (TEG) in its Final Report,[2] —active share[3] and therefore tracking error are uncertain over time,[4] due to the TEG’s absolute decarbonization proposal.[5] This blog assesses the S&P Eurozone Paris-Aligned Climate Index Concept’s (PAC Concept) potential active share sensitivity to future Read more […]

Should Green Benchmarks Include Fossil Fuel Stocks?

As green investing becomes ever more mainstream, there is greater scrutiny of the myriad “environmentally friendly” investment products that have emerged. Several green-labeled benchmarks have been criticized for including oil and gas stocks, for instance, sparking some controversy within the sustainable investment community. However, while efforts to make financial products more transparent are laudable, not Read more […]

The EU Climate Transition and Paris-Aligned Benchmarks: A New Paradigm

Since the release of the Intergovernmental Panel on Climate Change (IPCC) report[1] in October 2018, there has been growing investor interest in 1.5οC scenario-aligned portfolios. In May 2018, the EU announced its action plan for sustainable finance, which included proposals to create two new carbon transition benchmarks (EU Climate Transition [CTB] and Paris-aligned Benchmarks [PAB]). Read more […]

ESG: Why Not? Insignificant Alpha Observed between the S&P 500 ESG Index and the S&P 500

Does the S&P 500® receive a premium over the S&P 500 ESG Index? Absent a premium from the S&P 500, investors could have their cake and eat it too with the S&P 500 ESG Index: similar or better performance, along with the benefits of ESG. Academic literature suggests no sin stock premium over their non-sin Read more […]