Solactive has launched an index suite in response to the European Union’s move to introduce new standards on climate change.

The Solactive ISS ESG Provisional Paris-Aligned Benchmark indices (PAB) provide exposure to companies in line with a 2°C scenario through 2050, based on ISS ESG climate analysis.

The firm has also released the Solactive ISS ESG Provisional Climate Transition Benchmark indices (CTB), which has been set-up to project the path towards a low-carbon economy.

These indices have been launched in order to be aligned with the EU Technical Expert Group’s “Final Report on Climate Benchmarks and Benchmarks’ ESG Disclosures”.

The EU Commission report agreed to the publication of two types of climate benchmarks; the EU Climate Transition benchmark (CTB) and the EU Paris-aligned benchmark (PAB).

CTB indices feature a 30% reduction in carbon intensity versus their respective benchmark while excluding controversial weapons and international norms violators.

PAB indices go one further by implementing a 50% reduction in carbon intensity as well as additional activity-based norms.

Both index series incorporate an ongoing year-on-year self-decarbonisation of at least 7%.

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Timo Pfeiffer, chief markets officer at Solactive, commented: “Our two new index frameworks allow investors to proactively address climate change-related risks in their asset allocation.”

Solactive’s move follows the likes of MSCI and S&P Dow Jones Indices, which have all launched index suites which are in line with the EU’s new climate change standards.