German index firm Solactive has launched a range of low-carbon indices that exclude companies with high greenhouse gas emissions.
The firm’s low-carbon equity range of indices covers global and regional exposures to carbon and include a smart beta option.
The indices exclude companies with comparatively high greenhouse gas emissions, with emissions analysed on a sector-per-sector basis to account for varying carbon intensity.
Companies without “meaningful” climate risk mitigation or adaptation strategies are also excluded. Hence, only the top 50% companies showing the best carbon emission numbers compared to their respective sector are included.
Components are weighted according to market capitalisation. The smart beta versions are constructed by using a high dividend, low volatility approach.
Steffen Scheuble, chief executive officer of Solactive, said: “Global warming is a big challenge, but also a great opportunity. Investors now have the chance to take action on climate, mitigate risks and capitalise on the opportunities created by smart companies who pursue low-carbon investment strategies.”
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