Stock trader Euronext added a new climate index to the Paris Stock Exchange on Thursday, validated by scientific methodology and in line with the more ambitious goal of the Paris Agreement, which aims to limit global warming.
Called CAC SBT 1.5°, this index aims to select companies, without a defined maximum number, whose emission reduction objectives are recognized as compliant with that of the Paris Agreement, which aims to continue efforts to limit the increase in temperature at 1.5°C, according to a press release from the group.
To do this, Euronext will rely on the SBTi methodology (Science Based Targets initiatives), the main label for assessing companies’ commitments to reduce greenhouse gas emissions. It is a first for the stock operator but also among its competitors, he points out to AFP.
In the other climate indices, the data is provided by external service providers specialized in the analysis of environmental, social and governance (ESG) criteria.
To qualify for inclusion in the index, the company must also be one of the 120 largest French stock market capitalisations.
The goal of the 2015 Paris Agreement aims to keep warming “well below 2°C” compared to the pre-industrial period, and possibly to 1.5°C.
“The launch of this index is a strong signal for the transition to responsible investing,” said Stéphane Boujnah, head of Euronext, which manages seven European stock markets.
The CAC SBT 1.5° index was created less than two years after the launch of an ESG CAC 40 index, made up of forty stocks selected according to environmental, social and governance (ESG) criteria.
Like him, it must respond “to a growing demand for sustainable investment instruments from investors”, underlines Euronext, which underlines the voluntary approach of the companies that have chosen to work with SBTi to reduce their emissions.
For the moment, 38 values are included in this index, including the heavyweights of luxury, the locomotive of the Parisian market. Other companies, including Euronext, have submitted their targets to SBTi and are awaiting its approval.
As regards the CAC 40 and the CAC 40 ESG, the composition of the new index will be reviewed quarterly according to a methodology that will comply with European legislation.
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