Non-profit analyst teams up with Euronext to launch 'world's first' global index selecting stocks based on their performance against key environmental challenges
CDP has today launched two new environmental indices that will select stocks entirely based on their performance in tackling climate change, water security, and deforestation.
The investor backed non-profit, known for its work encouraging corporates to disclose environmental data, has teamed up with European stock exchange Euronext to launch the Euronext CDP Environment World EW, and the Euronext Environment Eurozone EW.
Laurent Babikian, director of investor engagement at CDP Europe, said the new indices would help drive capital towards low-carbon opportunities.
"The Paris Agreement and the Sustainable Development Goals demand that significant capital is allocated to low carbon, water-secure and deforestation-free businesses," he said. "The launch of these new indices marks a major milestone in delivering a selection global stocks which outperform the rest of the market across three critical themes of climate change, water and forests."
The global index selects the North American and European firms from among the 200 largest European and the 200 largest North American stocks on the Euronext 500 index that are ranked highest by CDP on thier environmental performance. The companies are assessed on their environmental score, which is determined based on their performance on climate change, water security, and deforestation issues.
L'Oréal, Alphabet, Microsoft, ING Group, Diageo, Philips, Danone and Goldman Sachs are among the firms to have made it into the global index.
Meanwhile, the Eurozone index selects the 50 highest-ranked European stocks, drawn from Euronext's Eurozone 300 index.
Both indices will be licensed exclusively to Goldman Sachs for use as an underlying index for retail market products in France, Belgium, Central and Eastern Europe and Russia.
Marine Abiad, head of distribution France at the bank, said environmental themes are a "subject of growing concern and interest" for its clients. "Launching the indices demonstrates our belief in designing solutions that offer our clients the opportunity and the transparency to invest in sustainable instruments through structured products," she added.