SRI index provider Solactive and South Pole Group, a company specialised in reducing greenhouse gas, have expanded their partnership to launch a new low carbon investment grade bond index.
The Solactive SPG Euro IG Low Carbon Bond Index will cover investment grade corporate bonds denominated in EUR while selecting companies that are less dependent on fossil fuels relative to higher carbon-emitting peers.
Maximilian Horster, partner, Financial Industry at South Pole Group comments on the launch: “Until recently, transferring the logic of low carbon investments from equity to fixed income has been a challenge. We are excited that our innovative methodologies and unmatched climate change data capabilities now enable easy and effective climate friendly fixed income investments.”
The basis of the new index are fixed rate bonds with an amount outstanding of at least 500 million EUR and a remaining time to maturity of at least 24 months. Companies that do not report their carbon emissions are excluded from the selection pool.
According to Solactive, non-reporting companies are likely to have higher carbon emissions and no carbon reduction strategies in place.