Euronext has 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.
