Intercontinental Exchange, an operator of global exchanges and clearing houses and provider of data and listings services, has selected the ICE 3-5 Year Euro Government Carbon Reduction Index, administered by ICE Data Indices, LLC, as the benchmark for a new exchange traded fund (ETF), called the Ossiam 3-5 Year Euro Carbon Reduction ETF. Ossiam is a leading smart beta investment management firm and is an affiliate of Natixis Investment Managers.
The ICE 3-5 Year Euro Government Carbon Reduction Index measures the performance of 3-5 year Euro sovereign bonds whose weightings are adjusted to achieve up to a 30 per cent reduction in the weighted average fossil carbon emissions of the countries in the index relative to the ICE BofA 3-5 Year Euro Government Index, a pure market-capitalisation weighted index. The fossil carbon emissions reductions are achieved while staying within a 5 per cent maximum deviation of each country’s market capitalisation weight. The carbon metric is based on CO2 per capita data published in the EU’s Emissions Database for Global Atmospheric Research. As of 31 May, 2020, the carbon reduction index achieved a 12.6 per cent reduction in the average CO2 per capita relative to the market weighted index. Both indices are part of the ICE Data Indices comprehensive family of more than 6,000 global fixed income, equity, commodity and currency indexes, which leverage ICE Data Services’ pricing, reference data and analytics solutions.
“We are happy to have ICE Data Services supporting our carbon reduction ETF,” says Bruno Poulin, CEO of Ossiam. “Their ability to design customized index solutions to meet our requirements and the quality of their platform were important considerations in our selection of the index.”
“Recognising the importance of ESG factors for many investors, we’re pleased to work with Ossiam as they launch a fund tracking the ICE 3-5 Year Euro Government Carbon Reduction Index,” says Phil Galdi, Head of Indices at ICE Data Services. “The selection of our index by Ossiam highlights the power of the ICE Data Indices platform and our ability to offer investors flexible and innovative solutions in index design and construction.”