Bloomberg today announced the launch of the Bloomberg Government Climate Tilt Bond Index. This is a new government bond benchmark series that aims to provide investors with exposure to the low carbon transition as well as the firm's flagship fixed income benchmarks by increasing the weighting of countries that incorporate climate change. Migration goals.
The new series will include 14 indices at launch, including global, euro area and emerging market benchmarks.
To give more weight to climate change, the new index uses the Bloomberg Government Climate Score (GOVS) to adjust country weights to assess the relative readiness of governments in the transition to a low-carbon world. Drawing on data from BloombergNEF, the score is comprised of three equally weighted pillars including 'Carbon Transition', 'Power Sector Transition' and 'Climate Policy'.
According to Bloomberg, the new index aims to balance climate change risk and opportunity considerations with the need to maintain a benchmark that accurately reflects market liquidity and concentration risk. The company added that the GOVS Climate Score can be used to create custom indices to achieve investment-specific portfolio objectives, such as minimum emissions reductions over a fixed year-over-year decarbonization trajectory.
Chris Hackel, Head of Sustainable Indexing at Bloomberg Index Services Limited, said:
“The newly introduced Bloomberg Government Climate Tilt Bond Index is designed to consider not only a country’s progress on its climate ambitions, but also measures of its future prospects, including investments in renewable energy capacity. ”
