S&P Dow Jones Indices launches three climate change index series

By Alyssa Stahr

Chicago, Sept. 17 – S&P Dow Jones Indices announces the launch of three new climate change index series: S&P Global 1200 Carbon Efficient Index Series, S&P Global 1200 Carbon Efficient Select Index Series and S&P Global 1200 Fossil Fuel Free Index Series, according to a Thursday press release. All three index series are derived from the constituents of the S&P Global 1200 Carbon Efficient Index Series.

The S&P Global 1200 Carbon Efficient Index Series is designed to measure the performance of the constituents of the S&P Global 1200, overweighting those that have lower levels of carbon emissions and underweighting those with higher levels in their respective GICS sectors, according to the release.

The Carbon Efficient Select series excludes companies with the largest relative carbon footprints rather than reweighting the constituents.

Companies that own fossil fuel reserves, including use through in-house or third-party generation, are excluded from the S&P Global 1200 Fossil Fuel Free Index Series.

“Many investors are trying to facilitate the transition to a low carbon economy by financing projects in the renewable energy sector, avoiding high-carbon producing companies or minimizing their exposure to fossil fuel companies,” Julia Kochetygova, head of sustainability indices at S&P Dow Jones Indices, said in the release.

“The three new S&P DJI index series are designed to provide alternative performance narratives to standard benchmarks, being comprised of those companies meeting the strict fossil fuel and carbon efficient standards set within each index series.”

Trucost plc will calculate companies’ carbon footprint for the Carbon Efficient and Select indexes using annual greenhouse gas emissions.

RobecoSAM researched ownership of fossil fuel reserves.

“Many investors understand that exposure to fossil fuels might create a new type of valuation risk in their portfolios. The S&P Global 1200 Fossil Fuel Free Index Series was developed for investors who want to address exactly this new risk,” Guido Giese, head of indices at RobecoSAM, said in the release.

S&P Dow Jones Indices LLC is part of McGraw Hill Financial, headquartered in New York City.

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