and transparent tools to facilitate the implementation of sustainable investment strategies .
Reliable and independent data as the basis for sustainable indices Reliable and certified data are the basis for any low carbon strategy . Yet , many investors do not have the time and expertise to analyze the carbon emissions of every company or do not have access to all necessary data . Therefore more than 800 investors , who account for more than one third of assets worldwide , rely on the data of CDP – the former Carbon Disclosure Project – a leading international non-governmental organization . CDP manages the world ’ s largest database of its kind with information on more than 2,000 listed companies . Its data helps investors to analyze the environmental risks and financial opportunities across their portfolios .
STOXX partnered with CDP to use their dataset of corporate environmental information as a highquality source to calculate the STOXX Low Carbon index family that was introduced earlier this year . The index family provides various strategies from reweighting broad benchmark and blue chip indices such as EURO STOXX 50 and STOXX Europe 600 by overweighting low-emitters and tilting away from high-emitters , all the way to options to divest from high carbon emitting companies . They are efficient
Climate change risks and opportunities hidden in supply chains According to CDP , the companies ’ own emissions often account for just 15 to 25 per cent of the total emissions across their supply chain , a fact not considered in the majority of cases . There is a small group of companies that besides implementing programs to reduce their own emissions , also employ strategies to reduce emission of their whole supply chain . These companies are rewarded with a place on CDP ’ s A list , based on their emissions reduction actions and results . This group is recognized as being the most transparent and fact based . The selection criteria are strict : Just 113 companies worldwide were included in the 2015 A list . Investors can invest in this holistic approach with the help of the STOXX Global Climate Change Leaders Index . Hence , they can support the forward-looking , effective strategies and significantly reduce climate risks in their portfolio straightaway . The index has reduced carbon emissions by nearly 80 per cent with annualized returns of more than nine per cent over the past three years . The UN Climate Summit has underlined the importance of minimizing global carbon emissions in the future . Many governments and companies are aware of their responsibilities and investors can support their efforts . Passive investing is a crucial part of being prepared for future investment requirements . Low carbon index strategies do not only cater to a social responsible investment approach , but have shown to perform similar or even better than their traditional counterparts . ■
Some investors may want to get the most out of the leading sustainable companies only , while others would consider companies and their whole supply chain additionally .
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