10-05-2022 · Insight

Peek into the world of Sustainable Index Solutions

Passive and sustainable investing can be combined effectively and efficiently without compromising financial objectives.

Passive solutions appeal to many investors given that their market-like returns are achieved in a low-cost and transparent manner. As sustainability integration is now top of mind for many investors, there is a need for compelling sustainable alternatives to passive market-cap indices that could serve both purposes.

In our series of articles, the Sustainable Index Solutions team outlines how passive solutions, that are aligned to the UN SDGs and that have considerably lower carbon footprints than generic market indices, can be constructed without dampening the financial outcomes that investors typically seek from these strategies. Moreover, the team discusses a novel climate risk measure (carbon beta) in an interview and describes how it goes above and beyond traditional carbon emissions data.