ET Index Research accelerates returns from the transition to a low-carbon economy.
“The purpose of the ET Carbon Rankings and corresponding ET Low Carbon & Fossil Free Index Series is to help investors reduce exposure to carbon-intensive assets without sacrificing returns. At the same time, the Engaged Tracking (ET) approach offers a clear means through which investors can accelerate the transition to a low carbon economy. This is achieved by reallocating capital from carbon-intensive companies to carbon-efficient companies, via a transparent rankings-linked indexing approach that is unique to the market. ET Index Research therefore sits at the heart of a systemic move towards the reduction of aggregate exposure to catastrophic climate change risk for all market participants.”
Sam Gill, CEO, ET Index Research
The Engaged Tracking mechanism works by publicly ranking companies and reweighting them in investable indexes according to their rank. For companies, the only way to gain a greater weighting within the indexes is to move up the ET Carbon Rankings.
This provides companies with a clear signal that investor capital will be re-allocated on the basis of action to reduce greenhouse gas emissions. It is designed to stimulate intra-company spending on carbon reduction strategies and adoption of low carbon business models.
As the share of global capital allocated to passive index investing continues to grow, the ability for index benchmarks to influence company behaviour and drive emissions reductions across the economy will increase.
ET Index Research is integrating additional Environmental, Social and Governance (ESG) metrics into the Engaged Tracking index suite. The objective is to provide investors with a with a systematic, sustainable form of corporate stewardship that acts for people, planet and profit.
All Engaged Tracking investment products and research are guided by clear principles which are intended to ensure the integrity of the process and a high impact outcome for our clients.
Read more about the ET Principles here.