In April 2020, we launched the S&P PACTTM Indices (S&P Paris-Aligned & Climate Transition Indices). The indices aim to align with the following: a 1.5oC climate scenario, the relevant aspects of the EU Low Carbon Benchmark regulation (BMR), and recommendations from the Task Force on Climate-related Financial Disclosures (TCFD), while maintaining a broad, diversified exposure. The S&P PACT Indices consist of the S&P Paris-Aligned (PA) Climate Indices and S&P Climate Transition (CT) Indices.
In this blog, we try to answer a simple question: what drives the S&P PACT Indices’ weights?
First, companies are excluded (exclusion effect) due to business activities, public controversies,1 and a low alignment score with the principals of the UN Global Compact—these companies receive zero weight.
Read the complete whitepaper now at the link below