MSCI and Bloomberg have separately launched new benchmarks aimed at investors wanting to reduce the carbon emissions and improve the sustainability credentials of their equity and bond portfolios.
MSCI has created five Climate Action indexes for equities, using four key data points to rank companies and build the benchmarks. Companies must score well cumulatively across the four criteria to be included.
The criteria are: green revenues, climate risk management, carbon intensity, and having emission reduction targets approved by the Science-Based Targets Initiative or a similar credible plan.
The suite includes benchmarks for US, European, and emerging markets equities, as well as versions of the popular MSCI World and MSCI ACWI indexes.
Meanwhile, Bloomberg’s benchmarks for fixed income are aligned with the International Capital Markets Association’s standards for green, social, and sustainability bonds, and use the company’s own indicators for the three bond groups.
The six benchmarks include a broad global index for green, social, and sustainability bonds, as well as euro- and US dollar-hedged versions, alongside individual indexes for green bonds, social bonds, and sustainability bonds.
Jonathan Gardiner, sustainable indices product manager at Bloomberg Indices, said the new benchmarks aim to “capture both short- and long-term market trends” and “meet the varied needs of the investment community exploring this growing market”.
Elsewhere, Exchange-traded fund (ETF) provider VanEck has launched a new ETF targeting sustainable infrastructure.
The VanEck Green Infrastructure ETF — which uses the stock market ticker RNEW — tracks the Indxx US Green Infrastructure MCAP Weighted Index. The benchmark includes US-domiciled companies that generate at least 50% of their revenue from renewable energy or sustainable infrastructure.
Michael Cohick, director of product management at VanEck, said the launch reflected the need for a “renewal and an upgrade” of US infrastructure. “Fortunately, government initiatives and private sector innovations are providing potential opportunities for investors to participate in this long-term trend,” he added.
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