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How to shift the passive trillions in investment index funds to net zero?
The extent to which index funds support asset managers’ net-zero targets is coming under greater scrutiny. Current methodologies for green and Paris Agreement (PA)-aligned indices can differ widely. While green indices use benchmarks based on companies’ past emissions, which can result in low levels of diversification; transition and PA-aligned indices, which include a wider range of assets, require forward looking metrics for their development and quality monitoring over time. This session will discuss the benefits and challenges with a range of indices to support a low-carbon transition, and explore options to improve methodological aspects, such as index composition and forward looking considerations. Speakers will also address the changing landscape of reporting requirements and potential scope for a consolidation of standards, which would in turn support a stronger role for providers and index funds in the low-carbon transition.
