Euronext launches CAC SBT 1.5° Index
Euronext on January 12 announced the launch of the CAC SBT 1.5° (gross return Bloomberg code: CASBT15P), an index investing solely in companies within the SBF 120 Index that have emissions reduction targets approved to be in line with the 1.5°C goal of the Paris Agreement.
After the successful launch of the Euronext CAC 40 ESG Index in March 2021, the CAC SBT 1.5° will provide a climate-focused version of the CAC 40 and respond to the growing demand for sustainable investment tools from investors and from the market.
The CAC SBT 1.5° Index is designed to facilitate the adoption of mainstream ESG investment approaches by institutional and private investors while providing a strong focus on climate change considerations:
It first incorporates negative screening and norm-based exclusion filters applied in accordance with the UN Global Compact Principles as well as exclusion screening for companies involved in unconventional oil & gas, coal, controversial weapons and tobacco activities.
The index is composed of companies having defined clear targets to reduce greenhouse gas (GHG) emissions in line with 1.5°C, which have been validated by the Science Based Targets initiative (SBTi).
Its methodology will evolve to integrate new EU regulations and standards as they emerge.
Components of the index are free-float market capitalisation weighted.
Composition of the index is revised on a quarterly basis.
Through the 2015 Paris Agreement, world governments committed to limiting the global temperature rise to well-below 2°C above pre-industrial levels and pursuing efforts to limit warming to 1.5°C. Emissions reduction targets approved by the Science Based Targets initiative (SBTi) represent the gold standard for corporate climate goals. Science-based targets provide a clearly defined pathway for companies to reduce their full value chain emissions in line with 1.5°C and are a necessary first step for companies to achieve net-zero in the longer term. The typical SBTi-approved company has cut its annual emissions (Scope 1 and 2) at a linear rate of 8.8% since setting targets.
Read the full press release here.