The EU defines a climate transition benchmark as one “where the underlying assets are selected, weighted or excluded in such a manner that the resulting benchmark portfolio is on a decarbonization trajectory and is also constructed in accordance with the minimum standards laid down in the delegated acts”.
Index providers who wish to offer one must meet the standards of the EU Benchmarks Regulation, which was updated in 2020 to provide a framework for climate-specific indices against which the performance of investment funds could be judged. This led to the creation of the EU Climate Transition Benchmark and the EU Paris-Aligned Benchmark. These pursue similar objectives but vary in their level of ambition.
As there was no global benchmark for climate bonds, Robeco created a Paris Aligned Benchmark in conjunction with Solactive, a German provider of financial indices. These are the indices against which the performance of the Robeco Climate Global Fixed Income strategies is measured, rather than the usual benchmarks used for credit funds, such as the Bloomberg Barclays Global Aggregate (corporate) Index.
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