Filed under: 10440542, Carbon, Carbon Asset Class, Carbon Derivatives, Carbon ETF, Carbon Index, Carbon investing, Carbon investments, Carbon market, Carbon markets, Low Carbon 100 Europe
Today, at a conference in Paris, organised by BNP Paribas Investment Partners on “Finance and Environmental issues”, NYSE Euronext announced the launch of a new carbon index identifying European companies with a low carbon footprint: the “Low Carbon 100 Europe® Index”. This conference attracted investors, asset management professionals, NGOs and academics.
At the same time, BNP Paribas announced the creation of a new ETF, using the newly launched index as its underlying, the first to do so: “EasyETF Low Carbon 100 Europe”, which will list on Euronext Paris shortly. This ETF will give investors the opportunity to invest in companies with a low-carbon footprint.
The Low Carbon 100 Europe® Index is designed to measure the performance of the 100 largest blue-chip European companies with the lowest carbon (CO2) emissions in their respective sectors or sub-sectors. The index uses data provided by Trucost, a UK-based environmental research company, and Crédit Agricole Cheuvreux . It is based on a unique methodology developed in collaboration with experts from Paris Dauphine University and validated by an independent scientific committee.
The new index has been created in partnership with Non-Governmental Organisations (NGOs): AgriSud, GoodPlanet.org and WWF. When compared to the group of 300 of the largest European companies used as a benchmark, the companies included in the Low Carbon 100 Europe® Index have, on average, around 42% lower carbon emissions. This shows that NYSE Euronext is providing investors with an effective instrument that takes into consideration CO2 emissions and may be used as a relevant benchmark for portfolio management as well as a suitable underlying for index-linked products such as ETFs.
Jean-François Théodore, Deputy Chief Executive Officer, NYSE Euronext said: “There is a growing investor appetite for products that are carbon efficient and we are delighted to launch the first pan-European low-carbon index, specifically designed with the support of an international group of experts and in close relation with NGOs . This innovative initiative enables NYSE Euronext to offer investors a new trading tool and to enlarge our environmental offer, which already includes Bluenext and Metnext.”
Trucost Chief Executive Simon Thomas said: “Trucost’s work with NYSE Euronext provides all investors with the opportunity to invest in carbon-efficient companies in their industry sectors. As the cost of emissions increases, the ground-breaking ETF and underlying index are designed to enable fund managers and retail investors to achieve above market returns with a much lower exposure to carbon risk.”
EasyETF Low Carbon 100 Europe will aim at replicating the performance of the reference index, upward or downward.
Gilles Glicenstein, Chairman and Chief Executive, BNP Paribas Asset Management, said: “We are proud to associate the name of BNP Paribas Asset Management with this initiative and to be able before long to launch, with the support of our NGO partners, an innovative product. EasyETF Low Carbon 100 Europe will be the first tracker enabling individual and institutional investors to integrate the carbon constraint in their investment choices. Besides, the launch of this new product is a natural expansion of our commitment in management and promotion of sustainable and responsible investment.”
Filed under: Carbon Index, Carbon investing, Carbon investments, Carbon market | Tags: Carbon Indexes, Carbon Indices, CER Index, Dow Jones-CCX Certified Emissions Reductions CER Index, Dow Jones-CCX European Carbon Index, Emissions Indexes, European Carbon Index
Dow Jones and the Chicago Climate Exchange launched two new carbon indexes, the Dow Jones/CCX European Carbon Index and Dow Jones/CCX Certified Emissions Reductions (CER) Index. These two indices will provide a benchmark for participants seeking investment exposure to the European carbon market and Kyoto’s Clean Development Mechanism (CDM).
In my opinion, this, along with the launch of the world’s first carbon ETN, is a big step toward carbon becoming a recognizable, and liquid, asset class. The more easily tradable carbon products there are on the market, the more likely new investors will take notice and participate in the carbon market in one form or another.
At this point there is little in the way of institutional or hedge fund investors participating in the market, but that could likely change in the near future with the addition of these new carbon investment products we are starting to see.
Filed under: Beijing Environment Exchange, Carbon, Carbon market, Carbon trading, China Carbon Market, China Carbon Trading, Shanghai Environment and Energy Exchange | Tags: Chinese Carbon Exchange
Two environment and energy exchanges were launched yesterday in Shanghai and Beijing, as the country increases efforts in emission cutting and energy conservation.
The Shanghai Environment and Energy Exchange will collect, filter and publicize information for the environment and energy-related equity and emission credit trading, and provide a platform for such deals between companies or institutions, according to a statement from Shanghai United Assets and Equity Exchange (SUAEE), the sole owner of the environment and energy exchange.
“The establishment of the environment and energy exchange can help transfer the past government-administrated energy allocation into the market,” said Luo Xinyu, general manager of SUAEE.
The exchange will also provide consultancy, project design and evaluation, fund operation and technical support to equity owners, energy reservation integrators, research companies and investment institutions.
Luo said the public trading of carbon emission credit on the exchange will change the current situation. The sales price of domestic carbon emission credit is lower than international prices.
“Overseas companies now can come to China and buy the carbon credit on the exchange,” said Luo. The Kyoto Protocol, effective from 2005, set strict restrictions on carbon emission of developed countries. Many developed economies began to buy carbon credits from developing countries.
Statistics from the United Nations showed that China provided one-third of the world’s carbon emission reduction volume, second only to India.
But Wu Jun, deputy director of the Environmental Protection Science and Technology R&D Center in Yixing, said the local government still needs to stipulate specific related rules on company’s energy emission credit and enhance its role in monitoring and enforcement.
Ai Baojun, vice-mayor of Shanghai, said in June that the government will step up efforts to raise the energy utility efficiency and reduce emission through industry restructuring and by updating techniques.
Meanwhile, Beijing also set up its environment exchange yesterday. Xiong Yan, president of Beijing Environment Exchange, said that it will mainly provide information on energy reservation related to technical deals, sulfur dioxide and COD (chemical oxygen demand) credit trading and emission reduction of greenhouse gases.
Luo told China Daily that besides Shanghai and Beijing, Tianjin was also planning to set up an environment and energy exchange.
Sourece: China government press release
Filed under: Carbon, Carbon Finance, Carbon futures, Carbon market, Carbon trading, Emissions market, Emissions trading
According to Point Carbon, the global carbon market did almost $60 billion in trades through the first six months of 2008, which is about equal to the total amount traded in 2007. The report attributes the boom to the increased price of carbon, which is up about 50% year over year, and a healthy increase in volume.
A Point Carbon analyst said, ““for all of Kyoto’s shortcomings, the carbon market owes pretty much everything to the Kyoto Protocol. The market is no longer immature and precocious, (more…)
Filed under: Carbon Credits, Carbon Derivatives, Carbon Exchanges, Carbon Finance, Carbon market, Carbon trading, Emissions trading, Japan, Tokyo Stock Exchange | Tags: Carbon Credit Trading, Carbon Credits Trading
The Tokyo Stock Exchange has started a Study Group to better understand the carbon market. The group’s aim is to ” to gather practical advice from experts and other concerned parties on the creation of a carbon market.”
Filed under: Carbon Asset Class, Carbon Finance, Carbon investing, Carbon investments, Carbon market | Tags: Carbon ETF, Carbon ETFs, Carbon Funds, Carbon Mutual Funds, Green Investments, Investing in Carbon
Last month I wrote a post on how Carbon is starting to be viewed as an asset class by the investment community. I stumbled upon another reference to this in an article entitled “Is Carbon The Next Big Asset.” This article is a little more focused on Australia, but it does discuss how it is being viewed around the world as well. Here’s an excerpt: (more…)
