Ninety One launches net-zero index

Ninety One has launched the Net Zero Sovereign Index, providing sovereign-debt investors with a high-calibre, independently verified assessment of Paris alignment.

The launch follows the asset manager’s interpretation that current net-zero approaches could have major negative economic and social impacts on some of the world’s least advantaged communities, which are often the most vulnerable to the impacts of climate change.

“With the UN declaring its latest climate report a ‘code red for humanity’, there can no longer be any doubt that we must act quickly to address climate change,” said Peter Eerdmans, head of fixed income at Ninety One.

“The first step in tackling this problem is for investors to get better at assessing whether an investment or portfolio is aligned with a credible net-zero pathway that works for all of the world’s 7.9 billion people.”

The Net Zero Sovereign Index covers 115 countries across emerging and developed markets. Its aim is to support sovereign-bond investors’ engagements with governments, so that they can hold public officials to account and encourage positive change.

“Investors need better measures to decide what is the right and fair way to build net-zero-aligned portfolios. We developed the Net Zero Sovereign Index to address the growing need among asset owners and managers for the means to show that their sovereign bond portfolios are Paris-aligned and on a credible path to net zero,” Mr Eerdmans said.

“We believe the index provides greater capacity to support a fair transition for emerging markets and will help sovereign-debt investors hold governments to account for their climate policies and actions.”