Euronext announced the launch of the CAC SBT 1.5°, an index that invests solely in companies in the SBF 120 Index that have emissions reduction targets approved to meet the Paris Agreement’s 1.5°C target.
Following 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 investors and the market’s growing demand for sustainable investment tools.
The CAC SBT 1.5° Index is intended to facilitate institutional and private investors’ adoption of mainstream ESG investment approaches while placing a strong emphasis 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.
- The composition of the index is revised quarterly.
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. As a result, 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. They are a necessary first step for companies to achieve net zero in the longer term. Since setting targets, the typical SBTi-approved company has cut its annual emissions (Scope 1 and 2) at a linear rate of 8.8%.