Following the successful launch of its low carbon equity index family, Solactive AG in collaboration with South Pole Group sets the bar for fixed income low-carbon index solutions with its new Solactive SPG Euro IG Low Carbon Bond Index. The index will cover investment grade corporate bonds denominated in EUR while selecting companies that are less dependent on fossil fuels relative to higher carbon-emitting peers.
In line with the ambition shown at the recent Paris Climate Conference, many of the world leading economies have already imposed taxes or partial taxes on carbon (e.g. US, China, UK, Sweden) or implemented regulatory standards to lower emissions (e.g. Emission Trading Scheme in the EU). France is the first country to have introduced a carbon reporting obligation on financial institutions. Growing global concern about climate change has also encouraged the adaptation of climate themed investment strategies and prompted the inception of investor coalitions committed to reduce their portfolio exposure to greenhouse gas emissions. However, the mainstreaming of low carbon in finance has been limited to the equity side so far.
With a large proportion of global assets dedicated to fixed income debt, tapping into debt markets is essential to accelerate the transition towards a low-carbon economy and ultimately attain the “two-degree target”. Institutional investors have lacked investment-grade opportunities to invest in bonds where revenues are specifically allocated to climate change solutions in the past.
The Solactive SPG Euro IG Low Carbon Bond Index will attend to the needs of all risk-sensitive fixed income investors that seek to reduce the carbon footprint of their investment portfolio and mitigate climate change related investment risk. For the creation of the index, Solactive has extended its successful partnership with South Pole Group, the world’s leading provider of sustainability and climate finance solutions, and build on its past expertise in the development of climate-themed bond indices (Solactive green bond indices).
Dr. Maximilian Horster, Partner, Financial Industry, South Pole Group explains: “Until recently, transferring the logic of low carbon investments from equity to fixed income has been a challenge. We are excited that our innovative methodologies and unmatched climate change data capabilities now enable easy and effective climate friendly fixed income investments.”
Steffen Scheuble, CEO, Solactive AG says: “Solactive will make a vital contribution to the integration of climate change and mitigation efforts in fixed income investments as it will be providing the first diversified investment grade universe of bonds dedicated to finance low carbon companies.“
The basis of the Solactive SPG Euro IG Low Carbon Bond Index is the Solactive Euro IG Corporate Index, including fixed rate bonds with an amount outstanding of at least 500 million EUR and a remaining time to maturity of at least 24 months. Companies that do not report their carbon emissions are excluded from the selection pool since non-reporting companies are likely to have higher carbon emissions and no carbon reduction strategies in place. Finally, companies are selected if their carbon footprint scaled by revenues as determined by the methodology of South Pole Group lies below the median carbon score in their economic sector.
Index components are weighted by market value.
4 Common Items That Can be Reused Again and Again
As a society we are getting much better at taking our obligations to the world and environment around us more seriously. This is undoubtedly a good thing! The effects of climate change are beginning to manifest across the world, and this is turning the issue from an abstract threat into a very real danger. Trying to introduce some greener, more eco-friendly practices into your life isn’t just a great way of doing something beneficial for society and the world around you. It is a wonderful way of engaging positively with the world and carries with it numerous psychological benefits.
Being a greener, more ecologically friendly person doesn’t require any dramatic life changes. Breaking or making a few small habits is all it takes to make your life a greener one. In this article we look at one of the easiest, yet most effective green practices to get into: reusing everyday items.
Jars and Containers
Glass and metal are widely recycled, and recycling is a good thing! However, consider whether any containers you buy, whether it’s a tub of ice cream or a jar of coffee, can be washed out and reused for something else. Mason jars, for example, can be used to store homemade pasta sauce and can be washed for future use. Once you start thinking about it, you will find endless opportunities to reuse your old containers.
An ice-cold soda is a wonderful treat on a hot day, but buying soda can get expensive, and the manufacturing and distribution of the drinks themselves isn’t great for the environment. However, by holding on to your old soda bottles and repurposing them as water bottles, you can save money on drinks, or use them to measure out water for your garden.
Most of the time groceries come in paper bags, which are better for the environment than the plastic alternatives, but they are less durable and thus harder to reuse. Whenever the store places your items in a plastic bag, hang onto it so you can reuse the bags again. If you want to take it one step further, consider looking into buying some personalized recycled bags. These bags are designed to last for a long time and are made of recycled materials. They look striking and unique, they’ll turn heads, and maybe even attitudes!
If you’re a keen gardener, then you will already probably know how to reseed your plants in order to ensure a fresh crop after each plant’s lifecycle. If you have space in your garden, or haven’t yet tried your hand at gardening, then consider planting a small vegetable plot. Growing your own veggies means that you’ll be helping to cut back on the emissions generated by their transport and production. The best part about growing your own food in this way is that, by harvesting properly and saving the seeds, you can be set up with fresh vegetables for life!
Reusing and recycling common household items is an easy way to make your world a little bit greener. Once you start looking for these opportunities you’ll realize that they’re everywhere!
These 5 Green Office Mistakes Are Costing You Money
The sudden interest in green business is very encouraging. According to recent reports, 42% of all companies have rated sustainability as an important element of their business. Unfortunately, the focus on sustainability will only last if companies can find ways to use it to boost their ROI.
Many businesses get so caught up in being socially conscious that they hope the financial aspect of it takes care of itself. The good news is that there are plenty of ways to go green and boost your net income at the same time.
Here are some important mistakes that you will want to avoid.
Only implementing sustainability on micro-scale
The biggest reason that brands are going green is to improve their optics with their customers. Too many businesses are making very minor changes, such as processing paperwork online and calling themselves green.
Customers have become wary of these types of companies. If you want to earn their business, you are going to need to go all the way. Bring in a green business consultant and make every feasible change to demonstrate that you are a green organization from top to bottom.
Not prioritizing investments by long-term ROI
It isn’t realistic to build an entirely green organization overnight. You will need to allocate your capital wisely.
Before investing in any green assets or services, you should always conduct a long-term cost benefit analysis. The initial investment for some green services may be over $20,000. If they don’t shave your cost by at least $3,000 a year, they probably aren’t worth the investment.
Determine which green investments will have the best pay off over the next 10 years. Make these investments before anything else. Then compare your options within each of those categories.
Implementing green changes without a plan
Effective, long-term planning is the key to business success. This principle needs to be applied to green organizations as well.
Before implementing a green strategy, you must answer the following questions:
- How will I communicate my green business philosophy to my customers?
- How will running a green business affect my revenue stream?
- How will adopting green business strategies change my monthly expenses? Will they increase or decrease them?
- How will my company finance green upgrades and other investments?
The biggest mistake that too many green businesses make is being overly optimistic with these forecasts. Take the time to collect objective data and make your decisions accordingly. This will help you run a much more profitable green business.
Not considering the benefits of green printing
Too many companies believe that going paperless is the only way to run a green organization. Unfortunately, going 100% paperless it’s not feasible for most companies.
Rather than aim for an unrealistic goal, consider the option of using a more environmentally friendly printer. It won’t be perfect, but it will be better than the alternative.
According to experts from Doranix, environmental printers have several benefits:
- They can process paper that has been completely recycled.
- They consume less energy than traditional printers.
- They use ink that is more environmentally friendly.
You want to take a look at different green printers and compare them. You’ll find that some will meet your needs as a green business.
Poorly communicating your green business strategy to customers
Brand positioning doesn’t happen on its own. If you want to run a successful green business, you must communicate your message to customers as clearly as possible. You must also avoid the appearance that you are patronizing them.
The best approach is to be clear when you were first making the change. I’ll make an announcement about your company‘s commitment to sustainability.
You also want to reinforce this message overtime by using green labels on all of your products. You don’t have to be blatant with your messaging at this stage. Simply provide a small, daily reminder on your products and invoices.
Finally, it is a good idea to participate in green business seminars and other events. If your community has a local Green Chamber of Commerce, you should consider joining as well.
- Energy3 weeks ago
How Much Energy Does Bitcoin Use, Really?
- Environment4 weeks ago
Biggest Tip to Eco-Friendly Car Ownership (Which May Surprise You)
- Energy4 weeks ago
Top 5 Changes You can Make in Your Life to Reduce Your Carbon Footprint
- Energy4 weeks ago
4 Energy Efficient Home Upgrades that You Can Install Yourself