Euronext has launched a climate-focused version of the CAC 40 to respond to the growing demand for sustainable investment tools.
The stock exchange has partnered with Amundi, the Science Based Targets initiative (SBTi) and CDP to develop the CAC SBT 1.5° Index.
Europe’s largest asset manager, with €1.9 trillion assets under management, has supported the index to facilitate the adoption of mainstream ESG investment approaches.
The index also meets investors’ growing demand for sustainable investing, as demonstrated by a recent Morningstar report which found ESG strategies accounted for over 60% of ETF flows in 2022.
The new index invests in the most climate-friendly companies in the SBF 120 Index, which consists of all 40 stocks in the CAC 40 and other French-listed equities.
All companies included in the index must have clear targets to reduce greenhouse gas emissions in line with 1.5°C, which have been validated by the SBTi.
Since setting targets, the typical SBTi-approved company has cut annual Scope 1 and 2 emissions by 8.8%, according to Euronext.
The index excludes companies that violate the UN Global Compact Principles, which address human rights, labour, environment, and anti-corruption. Companies involved in unconventional oil and gas, controversial weapons, and tobacco activities are also excluded.
Stéphane Boujnah, chief executive officer and chairman of the managing board of Euronext, said: “The launch of this index is a strong signal of the transition towards responsible investment.
Euronext is playing a crucial role in empowering sustainable finance across all its markets and in supporting the allocation of capital to sustainable initiatives through the launch and publication of ESG indices.”
The launch of the CAC SBT 1.5° Index follows the creation of the Euronext CAC 40 ESG Index in March 2021.
The launch also contributes to the increasing number of ESG ETF launches recently.
In December, DWS launched a new Paris Climate Agreement-aligned emerging equity markets Xtrackers ETF.
In November, Fidelity International added a Paris-aligned sustainable ETF to its range of climate-focused investment solutions.
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