CDP has introduced two new indices that select stocks based on the work companies are doing to tackle issues related to water security, climate change, and deforestation.
CDP, a non-profit organization that runs a global disclosure system for companies and subnational governments, partnered with Euronext, a European stock exchange, to launch Euronext CDP Environment World EW and Euronext CDP Environment Eurozone EW.
“The Paris Agreement and the Sustainable Development Goals demand that significant capital is allocated to low carbon, water-secure, and deforestation-free businesses,” said Laurent Babikian, director of investor engagement at CDP Europe. “The launch of these new indices marks a major milestone in delivering a selection global stocks which outperform the rest of the market across three critical themes of climate change, water and forests.”
Launched along with the global index, the Euronext CDP Environment Eurozone EW selects the 50 highest-ranked European stocks from the universe of stocks included in the Euronext Eurozone 300 index.
It follows the September 2018 launch of the Euronext CDP Environment France, the first ever index to use corporate scores on water security and forests alongside those for climate change.
The two new indices are licensed exclusively to Goldman Sachs for use as the underlying for structured products for sale in the retail market in France, Belgium, Central and Eastern Europe, and Russia.
“ESG themes are a central topic in our economy’s current development and a subject of growing concern and interest from investors,” said Marine Abiad, head of distribution France at Goldman Sachs for Structured Products. “Launching the indices demonstrates our belief in designing solutions that offer our clients the opportunity and the transparency to invest in sustainable instruments through structured products.”
Supported by a European political context increasingly in favour of developing green finance, the two new indexes allow for greater diversification in the products offered to retail investors in Europe.