S&P DJI, BOCHK, launch climate transition index covering Hong Kong Bay Area companies.

Index provider S&P Dow Jones Indices (S&P DJI) and Bank of China Hong Kong (BOCHK) announced the launch of the first climate transition index covering companies in the China Hong Kong Greater Bay Area (GBA). The new S&P BOCHK China Hong Kong Greater Bay Area Net Zero 2050 Climate Transition Index is designed to measure the performance of companies in the bay area, while achieving a variety of decarbonization targets. According to S&P DJI, the index can also be used for investment tools aimed at reorienting capital towards businesses with improved emissions performance. The index measures the performance of eligible equity securities from the underlying S&P China-Hong Kong Greater Bay Area Index selected and weighted to be compatible with a 1.5ºC global warming climate scenario. It is designed to meet the minimum standards for EU Climate Transition Benchmarks (CTB) Regulation to achieve the goals of the Paris Agreement and help mitigate the risk of greenwashing. CTB criteria include 7% annual decarbonization, and a 30% minimum reduction in GHG emissions intensity relative to the market index. The new index also applies ESG screening criteria, based on companies’ involvement in business activities such as controversial weapons and tobacco, alignment with the principles of the United Nations Global Compact, and involvement in relevant ESG controversies.