S&P DJ Launches two New Net-Zero Indices

    Stockholm (NordSIP) – S&P Dow Jones Indices (S&P DJI), a leading index provider, announced the launch of the S&P Net Zero 2050 Climate Transition Select Index Series and S&P Net Zero 2050 Paris-Aligned Select Index Series at the end of November. The new indices are specifically designed as underlying indices for the structured product market which has been increasingly incorporating ESG principles.

    The two indices provide “Select Index” additions to the existing S&P Net Zero 2050 Climate Transition ESG Index Series and the S&P Net Zero 2050 Paris-Aligned Climate ESG Index Series, which are “aligned with the European Union’s minimum standards for low carbon benchmarks under Regulation (EU) 2016/1011”, the index provider explains.

    “We are very excited to extend our S&P Net Zero 2050 ESG index offering to include indices which bring greater transparency in measuring climate-related risks and that have been designed to cater to the structured product market. S&P DJI is committed to helping our customers and market participants address climate change and achieve their goals in the path to net zero by 2050,” said Jaspreet Duhra, Global Head of ESG Indices at S&P Dow Jones Indices.

    The indices focus on a selection of targetted large-cap companies designed to be collectively compatible with a 1.5ºC global warming climate scenario. Exclusions apply to companies involved in controversial weapons and tobacco business activities, ESG controversies and those that do not comply with the United Nations Global Compact (UNGC) principles are excluded.

    S&P DJI first introduced the index series over a year ago as the S&P Paris-Aligned & Climate Transition Indices (S&P PACT). These indices are designed to closely track the performance of their parent benchmarks whilst meeting multiple climate-related criteria. Following a series of market consultations, S&P DJI strengthened the indices’ eligibility criteria and later added “Net Zero 2050” to the index name to better reflect and capture their stated objectives in measuring ESG performance and alignment with the objectives of the Paris Agreement. These methodology changes mean investors no longer need to choose between broad ESG indices and net zero/1.5°C-compatible indices—a first for the market.

    Filipe Albuquerque
    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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