15 Dec 2020

Can Climate benchmarks go beyond the E in ESG?

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For Marketing Purposes – FOR QUALIFIED INVESTORS ONLY– This document is reserved and must be given in Switzerland exclusively to Qualified Investors as defined by the Swiss Collective Investment Scheme Act of 23 June 2006 (as amended from time to time, CISA).

As their name implies, Climate-aligned benchmarks are designed for climate action, with the primary goal of immediately reducing a portfolio’s carbon intensity and emissions based on a target trajectory.

But this “Paris-Aligned” goal can sometimes help address other environmental and societal issues – ones that are usually identified in separate ESG strategies.

In this report, we review the ESG characteristics of MSCI and S&P climate indices and compare them with ESG benchmarks. Some of our key takeaways include:

  • The significant reduction in a portfolio’s carbon intensity also improves its Environmental score.
  • Climate benchmarks can also address broader Societal concepts such as supply chain resilience.
  • If the application of broad ESG filters in a climate benchmark is too strict, companies leading the climate transition risk being excluded rather than simply being penalised with a lower weighting
  • The S&P Global Developed PAB index shows a similar performance profile to the MSCI World SRI index, with the source of outperformance for the latter being attributable to just a handful of stocks

Important informations

This document has been provided by Lyxor International Asset Management that is solely responsible for its content.FUND NAME SUBFUND NAME COUNTRY OF DOMICILE
MULTI UNITS LUXEMBOURG Lyxor MSCI USA Climate Change UCITS ETF - Acc Luxembourg
MULTI UNITS LUXEMBOURG Lyxor MSCI World Climate Change (DR) UCITS ETF - Acc Luxembourg
MULTI UNITS LUXEMBOURG Lyxor MSCI Europe Climate Change (DR) UCITS ETF - Acc Luxembourg
MULTI UNITS LUXEMBOURG Lyxor MSCI EM Climate Change UCITS ETF - Acc Luxembourg
MULTI UNITS LUXEMBOURG Lyxor S&P 500 Paris-Aligned Climate (EU PAB) (DR) UCITS ETF - Acc Luxembourg
MULTI UNITS LUXEMBOURG Lyxor S&P Global Developed Paris-Aligned Climate (EU PAB) (DR) UCITS ETF - Acc Luxembourg
MULTI UNITS LUXEMBOURG Lyxor S&P Europe Paris-Aligned Climate (EU PAB) (DR) UCITS ETF - Acc Luxembourg
MULTI UNITS LUXEMBOURG Lyxor S&P Eurozone Paris-Aligned Climate (EU PAB) (DR) UCITS ETF - Acc Luxembourg
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