Euronext launches new CAC 40® ESG index to meet financial community’s sustainable investment needs

Euronext today announced the launch of the CAC 40® ESG index (gross return Bloomberg code: CACESGGR), designed to identify the 40 companies within the CAC® Large 60 Index that demonstrate the best Environmental, Social and Governance (ESG) practices.

Euronext today announced the launch of the CAC 40® ESG index [1] (gross return Bloomberg code: CACESGGR), designed to identify the 40 companies within the CAC® Large 60 Index that demonstrate the best Environmental, Social and Governance (ESG) practices. Responding to the growing demand for sustainable investment tools from investors and from the market, the CAC 40® ESG is Euronext’s first national ESG index and is derived from the CAC 40® index family.

The CAC 40® ESG index combines measurement of economic performance with Environmental, Social and Governance impacts, in line with the French SRI label [2] and the UN Global Compact principles [3]. The CAC 40® ESG index was developed following a large consultation among the financial community, public authorities and regulator. Euronext has partnered with Vigeo Eiris (V.E), an affiliate of Moody’s. V.E provides the ESG Assessment of companies for the composition of the index and engages in dialogue with them on their ESG performance.

Powered by V.E ESG data, the CAC 40® ESG index is designed to facilitate the adoption of mainstream ESG investment approaches by institutional and private investors:

  • The index methodology is aligned with the SRI label, a tool helping to identify sustainable and responsible investments, created and supported by the French Ministry of Finance.
  • It reflects a relative ranking for the “Best-in-class” 40 companies based on ESG criteria assessed by V.E.
  • It also incorporates negative screening and norm-based exclusion filters applied in accordance with the UN Global Compact Principles as well as exclusion screening for companies involved in “coal”, “controversial weapons” and “tobacco” activities.
  • Its methodology will evolve to integrate new EU regulations and standards as they emerge.
  • Components of the index are free-float market capitalisation weighted.

The composition of the index is revised quarterly by the independent scientific committee of the CAC family to integrate companies whose ESG performance has improved sufficiently since the previous review, following the V.E ranking.

Euronext expects to license the CAC 40® ESG index to a large range of financial services firms globally. ETF issuers such as Amundi, BNP Paribas AM and Lyxor have already confirmed their strong interest.

Stéphane Boujnah, CEO and Chairman of the Managing Board of Euronext N.V., said: “The launch of the CAC 40® ESG index today is an important step to accelerate the transition to a sustainable economy. The ESG version of Euronext’s benchmark CAC 40® index will allow investors to finance high-impact projects and companies, in line with the UN Global Compact Principles and the SRI label for sustainable and responsible investment. As a leading index provider in Europe, we are delighted to contribute, together with all markets participants, to the construction of a sustainable financial ecosystem.”

Sabine Lochmann, CEO & President of V.E and Global Head of Moody’s ESG Measures, commented: "Congratulations to Euronext on the launch of the CAC 40® ESG which will support the integration of ESG factors in investment processes. We are delighted to help power this index with our high-quality ESG data and are proud to be continuing to partner with Euronext, to catalyse the global shift to a sustainable and responsible financial system."

Jean-Jacques Barbéris, Vice-President of Finance for Tomorrow (F4T), Executive Committee Member and Head of institutional and corporate clients division of Amundi, commented: “At Finance for Tomorrow, we are very excited about the launch of the CAC 40® ESG. We were glad to be part of fruitful exchanges that led to the creation of the CAC 40 ESG, which is in line with our mission to promote sustainable finance. Leveraging on the successful French SRI label, this index is a strong signal of the transition towards responsible investment.”

Next Index Steering Committee Review: 10 June 2021.

Next Finance , March 24

Footnotes

[1] For more information on the composition of the index and the methodology, see https://live.euronext.com/en/produc.... Alongside the CAC 40® ESG GR index (ticker code CACESGGR) calculated based on gross return, with dividend reinvested, Euronext has introduced the CAC 40® ESG (ticker code CACESG) calculated based on price return and the CAC 40® ESG NR (ticker code CACESGNR), based on net return, with the dividend minus tax reinvested.

[2] The SRI label, launched by the French Ministry of Finance in 2016, helps to increase the visibility of SRI (socially responsible investment) products for investors and savers. Products seeking to obtain the label must meet a rigorous and exacting standard to demonstrate that they are managed using robust methods, are firmly committed to transparency and provide high-quality information.

[3] The UN Global Compact principles lay out companies’ fundamental responsibilities in the areas of human rights, labour, environment and anti-corruption. Euronext has endorsed these principles and contributed to the UN Global Compact Sustainable Oceans Business Group, formalising the UN Blue Bond principles.

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