CDP has partnered with Euronext to launch two indices that select stocks based on their performance in tackling climate change, water security, and deforestation.
CDP, the non-profit organisation which runs the global disclosure system for companies and governments, has teamed up with the European stock exchange Euronext to launch the Euronext CDP Environment World EW and the Euronext CDP Environment Eurozone EW.
The global index selects the North American and European firms from among the 200 largest European and the 200 largest North American stocks on the Euronext 500 index that are ranked highest by CDP on thier environmental performance. The companies are ranked on their environmental score, which is determined based on their performance on climate change, water security, and deforestation issues.
L'Oréal, Alphabet, Microsoft, ING Group, Diageo, Philips, Danone and Goldman Sachs are some of the firms that form part of the 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.
Both indices are licensed exclusively to Goldman Sachs for use as the underlying index for structured products for sale in the retail market in France, Belgium, Central and Eastern Europe and Russia.
Laurent Babikian, director of Investor Engagement at CDP Europe, said: "The Paris Agreement and the Sustainable Development Goals demand that significant capital is allocated to low carbon, water-secure and deforestation-free businesses. 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."
Marine Abiad, Head of Distribution France at Goldman Sachs for Structured Products, said: "ESG themes are a central topic in our economy's current development and a subject of growing concern and interest from investors. Launching the indices demonstrates our belief in designing solutions that offer our clients the opportunity & the transparency to invest in sustainable instruments through structured products."