ESGN - SI Indexes: Top-Down Targets Or Bottom-Up Aesthetics?

• As the Sustainable Investment landscape evolves, it has become clear that, while individual stocks may be excluded or underweighted for engagement purposes, portfolio-level attributes such as carbon emission reductions and green revenue uplifts must be explicitly targeted and reported.
• Furthermore, the introduction of Paris Aligned Benchmarks and Carbon Transition Benchmarks means that these index level quantities will be required to have precisely set values.
• The aim of this note is to address the debate as to whether headline (or “top-down”) portfolio-level targets are necessarily inconsistent with stock-level (or “bottom-up”) conditions required for successful corporate engagement.

For further details see: