Stockholm (NordSIP) – On February 6, climate data, analytics, and advisory service provider ISS ESG launched a suite of EU climate benchmark indices in partnership with index provider Solactive.
These new indices take into account the requirements specified by the European Union’s Technical Expert Group (TEG) on Sustainable Finance (2019) Report on Benchmarks and exceed TEG requirements by incorporating Scope 3 emissions from inception, ahead of the permitted four-year phase-in.
Solactive’s Global Benchmark Series (GBS) provides the constituents of the new index, while ISS ESG provides all ESG and climate data and analytics. According to the press release, “the Solactive ISS ESG Paris-Aligned Benchmark (PAB) indices are designed to meet highly ambitious climate-related investment strategy requirements, while Solactive ISS ESG Climate Transition Benchmark (CTB) indices are intended to assist in implementing a climate-aware core equity allocation.”
The PAB portfolio is aligned with a 2-degree scenario through the year 2050, an ISS ESG Climate Impact Assessment analysis shows. When compared to the base index (GBS), the PAB achieves a 66% reduction in Scope 1+2+3 carbon emissions, as well as a 99% reduction in total potential future emissions from fossil reserve owning companies. In addition, the green power generation capacity for PAB constituents reaches 65% compared with 15% for those in the GBS.
“Through this family of indices, we are pleased to deliver to market our industry leading climate data and analytics for the benefit of institutional investors seeking to deploy climate-conscious portfolios,” said Marija Kramer, Head of ISS ESG. “As our climate impact analyses demonstrate, the investment community now has a proven vehicle for direct investment in opportunities related to energy transition and a hedge against climate transition risks.”