The Northern Trust World Natural Capital Paris-Aligned Index Strategy Provides Institutional Clients with an Enhanced Net Zero Solution
Northern Trust Asset Management (NTAM), one of the world’s leading investment managers, continues to expand its sustainable index investment solutions with the launch of the World Natural Capital Paris-Aligned Index strategy.
“As the world is moving towards net-zero targets, we are seeing an increased interest in the solutions supporting those commitments. With this strategy, based on more than 30 years of experience managing socially responsible strategies, we’re looking to efficiently integrate climate and natural capital considerations.”
Efficiently integrating climate and natural capital considerations, the strategy uniquely combines alignment with the 1.5oC decarbonization pathway, nature-aware tilts and screens and proprietary Northern Trust Custom ESG exclusions, acknowledging the intrinsic synergies in the twin crises of climate change and biodiversity loss.
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“We are delighted to launch this strategy for investors across EMEA and APAC, recognizing that nature related risk mitigation and adaptation can play a significant role in achieving the Paris Agreement global warming objective,” said Julie Moret, global head of sustainable investing and stewardship at NTAM. “Investors are increasingly considering a wider spectrum of interconnected environmental considerations when looking to reflect the objectives of a transition to a climate-resilient economy. This strategy offers a compelling solution for them.”
The strategy aims to closely match the risk and return characteristics of the MSCI World Natural Capital Paris-Aligned Equity Select Index, a customized index that screens companies linked to ecosystem loss and water pollution, and to those that are mis-aligned with UN SDGs 14 (Life Below Water) and SDG 15 (Life on Land). There is an uplift in exposure to companies with nature-related transition opportunities including those with environmental impact solutions revenue and positive transition preparedness considering land use and biodiversity, resource use and emissions, effluents and waste.
Marie Dzanis, head of NTAM in EMEA, said:“As the world is moving towards net-zero targets, we are seeing an increased interest in the solutions supporting those commitments. With this strategy, based on more than 30 years of experience managing socially responsible strategies, we’re looking to efficiently integrate climate and natural capital considerations.”
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Sebastian Lieblich, head of ESG and Climate Indexes, MSCI said: “The range of MSCI climate indexes is specifically designed to help investors develop portfolios that meet their net zero commitments, integrate climate considerations and fulfil their investment objectives. We are pleased to support this launch with an index seeking efficient exposure to broad global equity markets with risk-controlled tilts towards positive climate change and natural capital-related objectives.”
Entrusted with US$1 trillion of investor assets, as of December 31, 2022, NTAM is among the world’s largest investment managers. The firm helps investors navigate changing market environments so they can confidently realize their long-term objectives. Northern Trust has more than 30 years of sustainable investing expertise and innovation, is a UNPRI signatory and is a founding member of the One Planet Asset Manager Initiative, which sees member asset managers commit to advance the understanding of the implications of climate-related risks and opportunities within long-term investment portfolios through engagement, research and sharing of investment practices. It is also a founding member of the Climate Action 100+ initiative that engages with 166 companies representing 80%+ of corporate greenhouse gas emissions globally and an official endorser of the Financial Stability Board Task Force on Climate-related Financial Disclosure (TCFD) – a consortium established in 2015 to develop a voluntary, consistent framework for use by companies to disclose climate-related financial risk to investors and other stakeholders.
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