Glad to report the launch of the S&P Global Net Zero 2050 Carbon Budget Index series https://lnkd.in/d5T_TqdR The approach is simple: what is true for the planet is true for all forms of financing. We considered the 2021 IPCC report that says that we only have 300GtCO2 left in 2020 if we want to achieve 1.5° increase with 83% probability. In 2022, it means to reduce the volume of CO2 by 12% per year (or -25% and then -10%). So we implement the same decarbonisation rate to indices. Good news is that the TE is low and it keeps a good level of stocks. Bad news is that as the carbon budget shrinks, the decarbonisation rate increases with time. If entering in 2025, the decarbonisation rate becomes -20% per year and -47% in 2028. Time is truly of the Essence: https://lnkd.in/dWiNUqdH With thanks to GFANZ for their kind reference in “Measuring Portfolio Alignment” (www.gfanzero.com) and last but not least, to my co-authors, P. Bolton and M. Kacpercyzk on the concept paper, “Net-zero carbon portfolio alignment” published in the FAJ https://lnkd.in/dBkzxJbF #green #financialinnovation S&P Global Richard Mattison Reid J. Steadman S&P Global Sustainable1
Max Wong
11mo
Nice paper on the portfolio alignment 👍🏻
MSCI Climate & Biodiversity Investment Research; TCFD and SBTi Member. Views are my own. 327ppm.
1yDear Fred, does this new index family take issuers' carbon emissions targets into account or only their current emissions ? I looked online and could only see details regarding the annual decarbonization rule.