Alternative Investments/ESG: Bloomberg and Goldman Sachs Create New Clean Energy Index
The new index is suited for use with index-linked products such as ETFs.
Bloomberg and Goldman Sachs asset Management have launched a new clean energy index. The Bloomberg Goldman Sachs Global Clean Energy Index was jointly developed by Bloomberg and Goldman Sachs Asset Management and identifies companies that have a significant business exposure to the clean energy sector. (ETF Strategy)
Bloomberg Goldman Sachs Global Clean Energy Index
Drawn from the initial universe of the Bloomberg World Index, analysts at Bloomberg NEF used a data driven approach to further identify companies with respect to their exposure to clean energy.
The index is a modified free float-adjusted market capitalisation-weighted index tracking over 175 global stocks.
Sectors selected for their upside exposure to clean energy included wind, energy storage, clean power, networks, digitalisation, bioenergy, solar and hydrogen.
Because the index will be rebalanced quarterly, it would be highly representative of companies that are keeping pace with the energy transition.
“With increased recognition of the significant global investments necessary for de-carbonization coupled with declining renewable energy costs and ever increasing technologies for renewable energy, our launch of a Clean Energy Index is particularly timely, and we look forward to offering this solution to the climate-focused investing community,” said Dave Gedeon, Global Head of Equity and Strategy Indices at Bloomberg.
Investors’ interest in ESG assets is borne out from the massive AUM of $ 4.5 billion garnered in net new assets by BlackRock‘s iShares Global Clean Energy ETF after clocking more than 12 months of positive inflows on the trot.
“Mainstream investors have an important role to play in financing the clean energy transition, especially as the battle against climate change intensifies,” said Kyri Loupis, Head of Energy Infrastructure & Renewables at Goldman Sachs Asset Management.”With new technologies and government policies emerging, however, the energy transition is rapidly evolving and requires a dynamic investment approach.”
According to a report by IMF, about $20 trillion in investment is needed over the next two decades for companies and countries to become carbon neutral by the middle of the century.
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