Euronext, the prominent European market infrastructure provider, has made waves today by unveiling two novel indices.
These are set to invest exclusively in firms that have received approval for their climate objectives from the Science Based Targets initiative (SBTi) and align with the 1.5°C goal of the Paris Agreement.
The genesis of these products is rooted in the growing concern about climate change and the desire for financial instruments that support sustainable businesses. They aim to further Euronext’s commitment towards their “Fit For 1.5°” and Growth for Impact 2024 strategy, facilitating environmentally-conscious investment.
Well established in the financial sector, Euronext offers an array of services ranging from trading, market data, to investor services, and more. With its commitment to innovation and creating a robust market infrastructure, Euronext has evolved into a vital cog in the European financial ecosystem.
Named the Euronext Europe SBT 1.5° and the Euronext Eurozone SBT 1.5°, these indices will follow up on the CAC SBT 1.5° launched earlier this year. These additions take Euronext’s tally of climate indices to 28. They intend to monitor companies within the Europe 500 and the Eurozone 300 indices, prioritising those that demonstrate strong climate policies, as validated by the SBTi.
As part of their commitment to sustainability, these new indices apply exclusions to certain sectors, namely unconventional oil & gas, coal, controversial weapons, and tobacco activities. This move signifies Euronext’s dedication to promoting companies with genuine environmental ambitions.
The SBTi, born from a partnership between CDP, World Resources Institute, the World Wide Fund for Nature, and the United Nations Global Compact in 2015, has become a critical organisation in the fight against climate change. In 2021, they unveiled a Net Zero Standard to assess and verify corporate commitments to achieving net zero emissions, setting stringent criteria that typically require a 90-95% decarbonisation by 2050.
Euronext N.V.’s CEO and Chairman of the Managing Board, Stéphane Boujnah, said, “The launch of the Euronext Europe SBT 1.5° and Euronext Eurozone SBT 1.5° indices is a first major step towards expanding the family of Euronext’s climate indices, after the successful launch of the CAC SBT 1.5°.”
Echoing the sentiments, SBTi’s CEO, Luiz Amaral, also added, “The success of and expansion of these indices demonstrate demand for investment opportunities that drive corporate climate ambition and action in line with science. We expect other indices to follow suit – helping to make science-based targets business as usual worldwide.”
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