INTRODUCTION
The S&P PACT™ Indices (S&P Paris-Aligned & Climate Transition Indices) represent a sophisticated, multifaceted approach that aims to align with a 1.5°C scenario and net zero emissions by 2050 (see Exhibit 1). The indices are also intended to meet the EU’s minimum standards for EU Climate Transition Benchmarks (CTBs) and EU Paris-Aligned Benchmarks (PABs) and the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), with the goal of being as efficient as possible to allow for a broad, diversified index. So, how have the indices performed?
PERFORMANCE
Across all regions tracked by the S&P PACT Indices, both the S&P Climate Transition (CT) Indices and S&P Paris-Aligned (PA) Indices have shown outperformance over their market-cap-weighted underlying benchmarks. In Exhibit 2, we can see that the outperformance over the benchmarks was positive for every listed index since inception.
