Press Release – December 15, 2022
Scientific Beta welcomes the NZAOA's Principles for Net-Zero-Aligned Benchmarks
Scientific Beta responds to the recent call to action for the development and uptake of Net-Zero-Aligned Benchmarks
The UN-convened Net-Zero Asset Owner Alliance (NZAOA) recently launched a call to action for asset owners and index providers for the development and uptake of Net-Zero-Aligned Benchmarks. NZAOA spells out ten principles such indices should follow to underpin the alliance's goal of transitioning investment portfolios to net-zero greenhouse gas (GHG) emissions by 2050, consistent with a maximum temperature rise of 1.5°C above pre-industrial levels.
In a new publication entitled "Scientific Beta welcomes the NZAOA's Principles for Net-Zero-Aligned Benchmarks," Erik Christiansen, ESG & Low Carbon Investment Specialist with Scientific Beta, shows how Scientific Beta's Climate Impact Consistent (CIC) indices integrate these 10 principles. In effect, the CIC indices are designed to maximise the climate impact potential of an investment strategy and, in line with the commitment that NZAOA members make, they "emphasise GHG emissions reduction outcomes in the real economy".
The NZAOA also points to some of the shortcomings of the European Union's climate benchmarks. Scientific Beta has previously voiced concerns about this regulation and concurs with the NZAOA's arguments. The publication shows how many indices that comply with the regulated Paris Aligned Benchmark (PAB) constraints fail to reflect some of the NZAOA's core benchmark principles.
Commenting on the release of the publication, the author, Erik Christiansen, said, "Our detailed analysis of the NZAOA's ten principles for the development and uptake of net-zero-aligned benchmarks shows that Scientific Beta's CIC indices respect these principles by being investable and macro-consistent while also maximising impact through portfolio construction. We also show that many strategies that simply satisfy the PAB regulation are far removed from NZAOA requirements, notably principles 3 and 4."
For more detailed information, please refer to the following Scientific Beta publication:
Scientific Beta welcomes the NZAOA's Principles for Net-Zero-Aligned Benchmarks, Scientific Beta Publication, December 2022
About Scientific Beta:
Scientific Beta aims to be the first provider of a smart factor and ESG/climate index platform to help investors understand and invest in advanced factor and ESG/climate equity strategies. Established by EDHEC-Risk Institute, one of the top academic institutions in the field of fundamental and applied research for the investment industry, Scientific Beta shares the same concern for scientific rigour and veracity, which it applies to all the services that it offers investors and asset managers.
On January 31, 2020, Singapore Exchange (SGX) acquired a majority stake in Scientific Beta. SGX is maintaining the strong collaboration with EDHEC Business School, and principles of independent, empirical-based academic research, that have benefited Scientific Beta's development to date. Since 2015, Scientific Beta has also been offering highly advanced strategies in the area of ESG and climate change, whether involving options integrated into smart beta indices or pure ESG or climate benchmarks.
As a complement to its own research, Scientific Beta supports an important research initiative developed by EDHEC on ESG and climate investing and cooperates with V.E and ISS ESG for the construction of its ESG and climate indices.
Scientific Beta, 2 Shenton Way, #02-02, SGX Centre I, Singapore 068804. For further information, please contact:
contact@scientificbeta.com, Web: www.scientificbeta.com
