Euronext improves low carbon index by rewarding sustainable companies

Dec 8th, 2015 | By | Category: ETF and Index News

Euronext, a leading eurozone exchange, has announced a major change in the methodology used for its Low Carbon 100 Europe Index, sharpening the traditional approach to assessing companies’ CO2 emissions.

Euronext improves Low Carbon Index by rewarding sustainable companies

The improved index will look to identify businesses making a positive contribution to the transition to a low carbon economy.

This new method is based on a more efficient means of measuring the energy performance of businesses. As an index-based solution to low carbon investment it can serve as an ideal basis for exchange-traded funds.

Anthony Attia, Chairman and CEO of Euronext Paris, said: “As market operator, Euronext has an important role to play in channeling savings and investment into energy transition. This new methodology confirms our commitment to offering investors an increasingly relevant standard for portfolio management, and an underlying asset suitable for different index-linked products.”

Designed in collaboration with international experts and NGOs in 2008, the Low Carbon 100 Europe Index measures the performance of Europe’s 100 largest blue chips with the lowest CO2 emissions in their respective sectors or sub-sectors.

The new version of the index uses a more in-depth approach to the assessment of each company’s carbon footprint. Instead of looking solely at emissions, the index will also identify businesses making a positive contribution to the transition process, not only through their own day-to-day performance, but also through the products they sell. Selection of index component companies will also reflect the emissions avoided as a result of their innovative approach to products and services.

Pascal Canfin, who chairs the Expert Committee of the Low Carbon 100 Europe Index, said: “The financial sector needs new compasses to guide its course and shift the focus to investments that comply with the 2° target for global warming. This new index is the first in the world designed to reflect an arc of investments that do just that.”

Investors wishing to gain exposure to the index through ETFs can look to the EasyETF Low Carbon 100 Europe ETF (ECN FP) from French bank BNP Paribas. The ETF is listed on Euronext Paris and carries a 0.60% management fee.

 

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