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Ninety One launches index to track EM climate performance -Breaking

© Reuters. FILE PHOTO : A smoke rises out of an electrical plant near the Polluted River Plate, Buenos Aires. June 5, 2017. REUTERS/Marcos Brindicci

LONDON, (Reuters) – Asset manager Ninety One announced Wednesday that it has launched a new index in order to track the alignment of emerging markets with international climate goals.

The pace at which many African, Asian, and Latin American countries transition to a less-carbon-intensive economy is likely to be the dominant theme of the COP26 discussions. Wealthier nations are being urged not to provide more assistance to those in need.

The risk is that more investors will look for ways to ensure their portfolios have zero carbon emissions by the mid-century. However, this could lead to them cutting off financing to countries in need, according to an asset manager.

The company created a Net Zero Sovereign Index in an effort to fix the issue. It hoped other asset owners would use it as a guide for their investments decisions, engagements with governments, etc.

According to the statement, the index would include 115 countries as well as 85 from emerging markets. It will provide a wider coverage than current indexes and be more beneficial for investors with larger portfolios.

A fairer path to net Zero was provided by the emerging market nations. It took into account several calculations, such as emissions levels and economic development.

Peter Eerdmans (head of Fixed Income Ninety One), stated that the Net Zero Sovereign Index was created to meet the increasing need for asset managers and asset owners to demonstrate their sovereign bond portfolios were Paris-aligned, on a credible track to net zero.

We believe that the index has greater potential to help emerging markets transition to fairness and will aid sovereign-debt investors to hold governments accountable for climate policy and other actions.

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Mike Robinson
Mike covers the financial, utilities and biotechnology sectors for Street Register. He has been writing about investment and personal finance topics for almost 12 years. Mike has an MBA in Finance from Wake Forest University.