The first taxonomy delegated act has been adopted, setting a technology-neutral level at 100g of CO2/kWh for any investments in energy production activities to be considered as ‘sustainable’. The set threshold is in line with science, and will help the EU reach its 2050 carbon-neutrality goal and fulfil its Paris Agreement commitments. Specific provisions for […]
EXECUTIVE SUMMARY
Net-zero commitments are starting to receive signatories, with USD 5.7 trillion and USD 37 trillion assets signed up to the Net Zero Asset Owners Alliance and Net Zero Asset Managers initiative, respectively.
Even optimistic targets show the world falling short of a 1.5°C scenario (see Exhibit 1). Scientific consensus suggests a 1.5°C pathway would require net-zero emissions by 2050, while 2°C pathways are closer to 2070-2080.
Absolute greenhouse gas (GHG) reduction (tracking a specified scenario) is aligned with meeting these goals, while relative GHG reduction (reduction to an underlying index) is better but not necessarily aligned.
The S&P PACT™ Indices (S&P Paris-Aligned & Climate Transition Indices) are designed to give investors confidence in following absolute decarbonization pathways.
BBVA Expands Its Recently Established âQuantitative Investment Strategiesâ Business With Paris Aligned And Climate Transition Indices By Solactive Date
18/01/2021
Leading Spanish bank BBVA issued its ‘Quantitative Investment Strategies’ (QIS), a business focusing on the design, manufacturing, and distribution of investment strategies via self-created indices aimed at end investors. After BBVA established the QIS with its first index, the Solactive BBVA ixESG Global Leaders Index, the bank now announced the intensification of its partnership with Solactive by extending its sustainability-centered QIS offering through the release of a Solactive-owned Paris Aligned (PAB) and Climate Transition Benchmarks (CTB). The Solactive BBVA Climate Action PAB Europe Index and Solactive BBVA Climate Action CTB Europe Index enable conscious investors to invest in companies at the forefront of a green and sustainable global economy.
While ultimately a noble and essential endeavour, the taxonomy has been subject to criticism from the start.
However, it is a reality that the sustainable finance sector will have to get onboard with, and this means its something that marketing and communications professionals should be focusing on, now.
What is the EU Taxonomy?
The European Commission – an eco-warrior of epic, institutional proportions - put forward its action plan on financing sustainable growth in March 2018. Steered by the EU Technical Expert Group on Sustainable Finance (TEG), the taxonomy was a critical part of this which essentially meant that there was some consistency in what could be classified as sustainable activities. The FT has coined it the first green gold standard.