Global exchange and clearing house operator Intercontinental Exchange (ICE) announced today the launch of a suite of corporate bond climate indices, expanding its Environmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. More bond index family with solutions designed to capture the goal of achieving net zero carbon emissions by 2050
The new indices use 23 of ICE’s corporate bond benchmarks to establish a family of 138 climate indices, creating six variants for each corporate bond index using different screening and carbon metrics.
Many of the new indices are labelled as Paris Aligned benchmarks (PABs) and Climate Transition benchmarks (CTBs). Indices that are labeled as PABs must meet criteria for asset selection that results in the index aligning with the long-term climate goals of the Paris Agreement. Criteria include a minimum reduction in greenhouse gas (GHG) emissions intensity of at least 50% compared to the market index, with annual GHG emissions intensity reductions of at least 7%, among others. CTB criteria also include 7% annual decarbonization, and a 30% minimum reduction in GHG emissions intensity relative to the market index.
Varun Pawar, Head of ICE Data Indices, said:
“The goal of carbon reduction has become a key focus for investors, as they begin to look at not just promises of change, but at actions companies are taking to achieve their emission goals. This new suite of indices brings together several of ICE’s strengths – its leadership role in fixed income securities and global Environmental criteria consider how a company performs as a steward of nature. More markets, experience creating innovative sustainable benchmarks and ability to deliver products that match investors current and future needs.”
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