CDP today announces the introduction of a new index created by Euronext that is the first, globally, to base its selection on how companies perform on the three key environmental challenges of climate change, water security, and deforestation. From a universe composed of the 120 largest stocks of the SBF120, the 40 with the best environmental score are selected for the new Euronext CDP Environment France EW Decrement 5% (FRENV) index.
The environmental score is the average of a company’s annual performance for its disclosures through CDP, the non-profit with the largest global environmental dataset.
With over 6300 companies disclosing in 2017, CDP’s A-F scores are the most comprehensive rating for corporate environmental performance and show investors the level to which a company actively manages its climate, water and deforestation-related risks and opportunities.
11 companies in France achieved an A for at least one program in 2017, including L’Oreal, Suez and Danone.
Euronext CDP Environment France will be exclusively licensed to Goldman Sachs, who will use the index as the underlying for structured products for sale in the interbank market in France.
The launch follows the French Financial Markets Authority’s (“AMF”) validation of a guide introducing a special status for ESG filters, which exempts them from counting as an additional mechanism for public offers in France.
Supported by a political context favourable to the development of green finance, the French regulator’s new position opens market access to new underlying instruments such as Euronext’s new index, and allows for a diversification in the products offered to French retail investors.
Laurent Babikian, Director of Investor Engagement at CDP Europe, said:
“The Paris Agreement and the Sustainable Development Goals demand that significant capital is allocated to low carbon, water-secure and deforestation-free businesses. This index – a global first in its environmental scope – marks a major milestone in delivering a selection of France’s biggest corporates who outperform the market across three critical themes of climate change, water and forests.”
Marine Abiad, Head of Distribution France at Goldman Sachs for Structured Products, said:
ESG themes are a central topic in our economy’s current development and a subject of growing concern and interest from investors. Launching the new Euronext CDP Environment France EW Decrement 5% Index demonstrates our belief in designing solutions that offer our clients the opportunity to invest in these underlying instruments through structured products.