Biodiversity Enablers Index
Euronext has released the world’s first Biodiversity Enablers Index (BEI), which aims to measure the positive impact of investees on biodiversity.
The Biodiversity Enablers Index will select companies from the Euronext World Index that are outperforming their peers in biodiversity and making a positive impact, while excluding companies that perform worse in terms of their biodiversity footprint. The index can serve as a benchmark for financial products such as ETFs.
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Characteristics of Biodiversity Enablers Index
In terms of environmental factors, BEI’s carbon footprint data is 8.59% higher than the benchmark index, and its greenhouse gas emission intensity is 15.89% lower than the benchmark index. In terms of coverage of Scope 1 and Scope 2, the BEI index reached 99.12%, while the Euronext World Index only reached 96.82%.
In terms of industry classification, BEI’s proportion in the manufacturing industry (39.4%) is lower than the benchmark (43.1%), but its proportion in the retail industry (11.6%) is higher than the benchmark (7.6%). Within the fossil fuel industry classification, BEI’s total exposure level is 8.4%, below the benchmark (9.1%).
In terms of social factors, no constituents in the BEI have a bad track record, compared with nine in the benchmark. Within the OECD guidelines, BEI also maintains zero records, compared with 15 presents in the benchmark. In addition, only 33 companies did not meet supply chain requirements, compared with 464 in the benchmark.
In terms of governance, BEI also performs well in terms of board independence (83%, versus 81%) and executive compensation excess ratio (57% versus 66%).
ESG Performance Based on EU Taxonomy
The EU Taxonomy provides a framework for assessing the alignment of investment portfolios with environmental objectives. When it comes to aligning constituent revenue figures in investees, BEI reaches 17%, compared with only 13% for the benchmark. In terms of mitigating climate change, the BEI achieved 15%, compared with only 11% for the benchmark. In terms of adapting to climate change, the BEI reached 1.95%, compared with only 1.21% for World Index.
In addition, BEI also adopts the principle of double materiality, which not only measures the company’s impact on biodiversity, but also considers the impact of biodiversity on the company’s business activities. From various aspects of data analysis, Biodiversity Enablers Index has a better ESG performance.
Reference:
Euronext Launches Innovative ESG Solutions
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