Industry Updates

Solactive expands climate change series with double fixed income index launch

George Geddes

a man smiling for the camera

Solactive has launched two fixed income indices as a part of its Paris Aligned and Climate Transition benchmark series.

The Solactive ISS ESG Euro Corporate IG Provisional Climate Transition Benchmark index is aligned with Solactive’s ISS ESG Provisional Climate Transition Benchmark indices (CTB) and the Solactive ISS ESG Euro Corporate IG Provisional Paris-Aligned Benchmark index is aligned with Solactive’s ISS ESG Provisional Paris-Aligned Benchmark indices (PAB).

The two indices incorporate a Scope 3 emissions protocol, modelled by ISS ESG, that takes into consideration a company’s entire production chain.

A client can use the respective framework for the two indices on a universe of indices of their choice.

All indices involve an optimisation mechanism to achieve decarbonisation goals while keeping turnover and risk metrics such as credit, duration, sector, and issuer risk comparable to the respective benchmark.

Solactive launched CTB and PAB in February following the European Union’s move to introduce new standards on climate change.

Other index providers such as FTSE Russell, MSCI and S&P Dow Jones Indices have also launched similar indices over the past 10 months that focus on climate change.

The fixed income indices launch means Solactive is the first index provider to offer the EU benchmarks across both equity and fixed income asset classes.

Timo Pfeiffer (pictured), chief markets officer at Solactive, said: “Given the relevance of these new benchmarks and our flexible architecture, it was evident to us that we needed to service clients on both the equity and fixed income side.”

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