SIX, a prominent financial services provider, has introduced a novel tool, the ‘SIX 1.5 °C Climate Equity’ flag.
This initiative aims to assist investors in identifying companies whose business models and future strategies align with the objectives of the Paris Agreement to limit global warming to 1.5°C above pre-industrial levels.
The motivation behind this new product stems from a growing investor demand for transparent and reliable tools to assess corporate commitment to climate goals. The flag serves as a critical resource for investors looking to support companies actively contributing to the fight against climate change.
SIX operates as a key player in the financial marketplace, specializing in providing a range of services including trading, clearing, settlement, and market data. SIX Swiss Exchange is one of the leading exchanges in Europe, known for its innovative solutions in the financial sector.
The ‘SIX 1.5 °C Climate Equity’ flag functions by highlighting companies that meet rigorous criteria, including their alignment with the 1.5°C global warming target. To qualify, companies must undergo a robust assessment process validated by approved reviewers such as S&P and SGS. This process includes a top-down analysis of the company’s value chain, a bottom-up evaluation of its emission reduction targets, and an activity-level assessment of its revenue and investments related to climate goals.
Regarding the flag’s specifics, it is valid for one year and requires annual renewal through confirmed compliance with the set criteria. This ensures that companies remain accountable and consistent in their climate strategies.
Further details reveal that the flag’s criteria were developed based on established sustainability principles and the latest scientific insights from the IPCC, alongside other significant sustainability frameworks like the CDP ACT initiative and the Climate Bonds Initiative.
SIX has also included insights from various industry stakeholders in the development of the flag, ensuring it meets the practical needs of the market while staying scientifically and ethically sound.
“Our new flag serves as a tool to enhance the visibility and reputation of companies. This in turn supports investors in making more informed decisions, reducing uncertainty around a company’s current and future climate emissions trajectory,” SIX Global Head Exchanges and Executive Board Member Bjørn Sibbern said. “We developed the concept for the flag following extensive exchange with listed companies, audit and legal firms, sustainability experts as well as industry associations and it represents a further step in our sustainability strategy.”
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