S&P Dow Jones Indices has released a new set of forward-looking indices that value companies based on predicted 2030 carbon prices.
Investors will be given a sense of future carbon risks with the launch of S&P's “carbon price risk adjusted” indices.
The 12 indices will weigh stocks based on estimated company valuation at risk from predicted 2030 carbon prices.
S&P will use Trucost’s corporate carbon pricing tool to create indices that reflect the future carbon risk within US, emerging market, global, European and South African stock markets.
The launch of the indices follows S&P's announcement in November 2017 that it would publish carbon metrics alongside the financial metrics for all of its indices.
S&P Dow Jones Indices senior director for ESG and strategy indices, Hannah Skeates, said: “As the efforts to achieve the commitments of the Paris Agreement and the transition to a low carbon economy progress, future carbon prices could lead to significant increased costs for companies which have not managed their global emissions.
“The S&P Carbon Price Risk Adjusted Index Series was developed to help market participants understand the financial risks embedded among the higher carbon emitters of the current global economy,” Ms Skeates said.
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