LONDON, November 22, 2021: S&P Dow Jones Indices (“S&P DJI”), the world’s leading index provider, today 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. These new indices are specifically designed as underlying indices for the structured product market which has been increasingly incorporating Environmental, Social and Governance (ESG) principles.
The indices measure the performance of a targeted number of the largest float-adjusted market
capitalization companies designed to be collectively compatible with a 1.5ºC global warming climate scenario. Companies that are involved in controversial weapons and tobacco business activities, ESG controversies and are non-compliant with the United Nations Global Compact (UNGC) principles are excluded.
The S&P Net Zero 2050 Climate Transition Select Index Series and S&P Net Zero 2050 Paris-Aligned Select Index Series are the latest additions to the S&P Net Zero 2050 Climate Transition ESG Index Series and 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.
“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 first set of indices that were launched included the S&P Net Zero 2050 Climate Transition Select and S&P Net Zero 2050 Paris-Aligned Select for S&P Eurozone 50, S&P France 20, and S&P EuroUSAJapan 100, along with their decrement versions. In the coming months, S&P DJI plans to launch additional indices based on its other widely tracked regional benchmarks.
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.
The research and methodology on the S&P Net Zero 2050 Climate Transition ESG Index Series and S&P Net Zero 2050 Paris-Aligned Climate ESG Index Series are available at www.spdji.com.
