Climate Leader Insight: The role of Indices and ETFs in the development of sustainable finance

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The role of Indices and ETFs in the development of sustainable finance
• Why/How indices can be a powerful tool in the reallocation of private capital towards more sustainable investments
• Is there a future for historical non ESG indices and products?
• Constraints and opportunities of regulation and labelling
• Examining concrete example of index based ESG investment products and solutions
• How to be sure these products respect their engagements

EuronextWe have over 600 indices of all sizes and profiles, that we design calculate, and publish, includings six major national indices in Europe, the AEX®, BEL 20®, CAC 40®, ISEQ 20®, OBX® and PSI 20®.  Euronext is Europe's leading ESG index rpovider. As one of the leading (ESG) index providers in Europe, we offer indices on a wide range of themes, from general ESG to climate, forest, water, governance, and energy transition. At the end of 2020, more than 300 listed structured products were linked to Euronext ESG indices, and over 200 products created forthe French market already had a combined AUM of €4.5 billion. To ensure our ESG indices are created with the strongest values and impact, we work with an open model, meaning we partner with several of the best ESG research providers such as ISS-ESG, Carbone 4, V.E (Vigeo Eiris) Moody’s and CDP. This guarantees non-biased data and enables access to a large variety of ESG metrics. As a pan-European exchange covering 6 countries, “local” is part of our DNA. We have the capacity to adapt to different national certifications and requirements such as PAB-CTB (Europe), SRI (France), Towards Sustainability (Belgium), FNG (Germany) and the Swan (Nordics).   We have over 45 ESG index families, including Europe's leading Low Carbon Europe 100 index launched back in 2008, now aligned to the current Paris Agreement Benchmark (PAB) label. The associated BNP Paribas Easy Low Carbon 100 Europe ETF which tracks this index remains among the top 3 in AUM in Europe. In November 2020, more than 70% of the total AUM invested in ETFs tracking PAB indices was invested in the BNP Paribas ETF.  In June 2020, we launched the Euronext® Eurozone ESG Large 80 Index, selecting the top 80 ranking large cap companies based on their ESG and energy transition and most recently the first national ESG index derived from the iconic CAC 40® index family, we are proud to welcome the CAC 40 ESG® index, powered by V.E (formerly known as Vigeo Eiris-an afilate of Moody's). Aligned with the French SRI label and UNGC principles, this index is designed to help identify the top 40 companies from the CAC® Large 60 demonstrating the best ESG practices. Our mission is to bring innovation to the markets, and we will continue to develop new ESG indices with and for our customers, and for our planet’s future.  

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