Exchange in Focus: Euronext launches new CAC 40® ESG Index
announced the launch of the CAC 40® ESG index, designed to identify the 40 companies within the CAC® Large 60 Index that demonstrate the best Environmental, Social and Governance (ESG) practices. Responding to the growing demand for sustainable investment tools from investors and from the market, the CAC 40® ESG is Euronext’s first national ESG index and is derived from the CAC 40® index family.
The CAC 40® ESG index
combines measurement of economic performance with Environmental, Social and Governance impacts, in line with the French SRI label and the UN Global Compact principles
which lays out companies’ fundamental responsibilities in the areas of human rights, labour, environment and anti-corruption.
The new index was developed following a large consultation among the financial community, public authorities and regulator. Powered by V.E ESG data, the CAC 40® ESG index is designed to facilitate the adoption of mainstream ESG investment approaches by institutional and private investors:
• The index methodology is aligned with the SRI label, a tool helping to identify sustainable and responsible investments, created and supported by the French Ministry of Finance.
• It reflects a relative ranking for the “Best-in-class” 40 companies based on ESG criteria assessed by V.E.
• It also incorporates negative screening and norm-based exclusion filters applied in accordance with the UN Global Compact Principles as well as exclusion screening for companies involved in “coal”, “controversial weapons” and “tobacco” activities.
• Its methodology will evolve to integrate new EU regulations and standards as they emerge.
• Components of the index are free-float market capitalisation weighted.
Stéphane Boujnah, CEO and Chairman of the Managing Board of Euronext N.V., said: “The launch of the CAC 40® ESG index today is an important step to accelerate the transition to a sustainable economy. The ESG version of Euronext’s benchmark CAC 40® index will allow investors to finance high-impact projects and companies, in line with the UN Global Compact Principles and the SRI label for sustainable and responsible investment. As a leading index provider in Europe, we are delighted to contribute, together with all markets participants, to the construction of a sustainable financial ecosystem.”
The composition of the index is revised quarterly by the independent scientific committee of the CAC family to integrate companies whose ESG performance has improved sufficiently since the previous review, following the V.E ranking.
Part of a global trend
Over 40 markets world-wide are covered by sustainability-related indexes. To learn more, visit the SSE’s database of stock exchange sustainability activities. Currently, the database has data on 106
stock exchanges and tracks progress on key activities where exchanges are promoting sustainable business and investment practices. It is the largest data set of its kind and the data is freely accessible.