Euronext responds to investors’ need for a public climate action benchmark in the Eurozone

Jun 18, 2020

On June 17 Euronext announced the launch of a new suite of ESG-focused products, services and initiatives, designed to provide a framework of tools for European capital markets to fuel sustainable growth.

According to Euronext's press release, the announcement represents a significant step forward in Euronext’s three-year strategic plan, “Let’s Grow Together 2022”, in which ESG was identified as a key strategic pillar.

Euronext's new ESG index responds to investors’ need for a public climate action benchmark in the Eurozone. The 'Euronext Eurozone ESG Large 80' tracks the Eurozone’s 80 best-performing Large Cap companies that are strong on social and governance criteria and leading the transition to a low carbon economy. 

The low carbon index, the Low Carbon 100, is now aligned with the current draft of EU regulation on low carbon benchmarks in conformity with the Paris Agreement objectives, whose framework is to be officially adopted later this year. Through Exchange Traded Funds provided by BNP Paribas, the index provides investors with a ready-to-use tool to support the environmental objectives required by the Paris Agreement i.e. a 7% year-on-year reduction of CO2 emissions, a limit of 1.5°C global temperature rises by 2050 and exclusion of fossil fuel companies.

Green Bonds and ESG Bonds

Euronext introduced a Green Bonds offering introduced in November 2019. It is expanding this offereing to other to other ESG-related bonds, including blue, social, sustainability and sustainability-linked bonds.

To date, 231 ESG bonds from 95 issuers are featured on the new Euronext ESG Bonds section. €54.3bn of green bonds were listed on Euronext last year and represented almost one fifth of global green bonds issued in 2019.

Advising issues 

Euronext has developed ESG Advisory services to enable issuers to reach new investors by clarifying their ESG strategy for capital markets and building their ESG profile with relevant reporting and improved governance. 

In January 2020, Euronext introduced a set of guidelines on ESG reporting for issuers. Drawing on recommendations from the UN Sustainable Stock Exchanges Initiative, the guidelines are designed to help listed companies structure their approach to ESG. Euronext has initiated, through FESE[1], a collective European task force to agree on common ESG measurement and reporting standards across all European exchanges. As an Official Supporter of the United Nations’ Sustainable Stock Exchanges initiative since 2015, Euronext firmly commits to the UN’s “2030 Agenda for Sustainable Development”. 

Stéphane Boujnah, Euronext CEO and Chairman of the Managing Board, said: “Euronext can significantly advance the European sustainability agenda through its unique role in financing the real economy, connecting local economies with global capital markets. Our ESG product strategy ensures investors can deploy their capital efficiently and transparently to support high-impact projects and companies. Furthermore, we are proud to be the first stock exchange to endorse the UN Global Compact’s nine Ocean Principles. Protecting our oceans and supporting marine conservation will be vital to repairing our ecosystems and bolstering the Blue Economy.”