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: 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: Continue reading
Filed under: Carbon Derivatives, Carbon Finance, Carbon futures, Carbon investing, Carbon investments, Carbon trading, NYMEX | Tags: NYMEX Carbon futures contracts, RGGI carbon contracts, RGGI Carbon Trading
NYMEX press release:
The New York Mercantile Exchange, Inc., a subsidiary of NYMEX Holdings, Inc. (NYSE: NMX), today announced that it will introduce a U.S. Regional Greenhouse Gas Initiative (RGGI) carbon allowance futures contract, in the third quarter of 2008, pending regulatory review.
The contract will be available via the CME Globex(R) electronic trading platform and NYMEX ClearPort(R) clearing. When launched, this is expected to be the first exchange-traded contract for compliance with a government cap-and-trade program in the U.S.
Filed under: Carbon Derivatives, Carbon Finance, Carbon futures, Carbon investing, Carbon investments, Carbon trading, Emissions futures, Emissions trading
The thought of carbon emissions as an asset class is pretty interesting. It will be interesting to see if investors start thinking of carbons as part of a well diversificed portfolio, or if carbon pushes out an efficient frontier. Anyway, here is a little discussion about carbon as an asset class, and if you find it interesting you should read the whole article since it gives a nice background about the carbon futures trading market. Continue reading
Filed under: Carbon Derivatives, Carbon Exchanges, Carbon futures, Carbon investing, Carbon investments, Carbon market, Carbon markets, Carbon trading, Emissions Derivatives, Emissions futures, Emissions market, Emissions markets, Emissions trading
Baby steps in the US. But its coming.
“With a federal government shortly to be elected, and several states, including California, already enacting emissions reductions plans, the U.S. will soon see new cap-and-trade regimes. But what will those regimes look like and how will they work? And, will those regimes encourage even further investments in the red-hot alternative energy sector? This panel will offer insights into these and other issues,” said Steve Wurzburg, managing partner of Pillsbury’s Silicon Valley office, who will moderate the program.
“With many energy industry measures already pointing to an explosion in investments Continue reading
Filed under: Carbon Derivatives, Carbon Exchanges, Carbon futures, Carbon investing, Carbon investments, Carbon markets, Carbon trading, CERs | Tags: Carbon Exchanges, Carbon futures, carbon investment, Carbon markets, Carbon permits, Carbon trading, CERs
This is still in its infancy. Give it five to ten years and this guy will get his wish:
Leon Bitton, vice-president of research and development at the Montreal Exchange, said the market will not just be for emitters, but for entrepreneurs and institutional investors.
In particular, he said it will be a way for certain money managers to manage risk for companies in their portfolios.
“Carbon is really becoming an asset class that is of interest not only for industrial for compliance purposes,” Bitton said.
“Eventually, you will be able to buy and sell (carbon) in a futures contract the same way you currently trade and do business in (other) futures.”
Carbon Finance, Markets, Futures, Derivatives, and Trading 