Bloomberg and MSCI Launch Corporate Paris-Aligned Indices

Bloomberg and MSCI announced the launch of the first indices in their joint Climate Benchmark offering with the Bloomberg MSCI Global, Euro and US Corporate Paris-Aligned Indices. According to a story in MarketsMedia news, these indices will serve as a benchmark for investors to assess the performance of corporate bond holdings that seek to meet or exceed the minimum standards of the EU Paris-Aligned Benchmark (PAB) label. The indices combine Bloomberg’s fixed income indices family with MSCI’s Climate data, research, and analytics for investment-grade, fixed-rate, and global, US or EUR-denominated corporate bonds. To ensure they meet the minimum PAB criteria, each index sets an initial 50% reduction of absolute greenhouse gas (GHG) relative to the standard Bloomberg parent (Euro, US, or Global) corporate index, followed by an annual 7.5% decarbonization relative to the baseline emissions. These emissions reductions are achieved by excluding the largest GHG emitting companies. The indices use an exclusions-based approach to achieve the required decarbonization trajectory. The monthly exclusions process will establish the emissions threshold required to maintain compliance with the PAB label decarbonization trajectory for the following month.