FTSE Russell, the index and analytics company, has launched the first climate-based government bond index in the world.
The FTSE Climate Risk-Adjusted World Government Bond Index (Climate WGBI) has been launched in London, UK.
The index assesses how prepared products’ governments are to respond to climate change, edie.net reported.
FTSE Russell wants to enable sovereign debt investors to introduce climate change risk as a factor in their decision-making process.
Climate WGBI ranks bonds from 22 nations, using data provided by the FTSE World Government Bond Index.
The metrics processing the data was developed by Beyond Ratings, the analytics provider recently acquired by London Stock Exchange Group.
“The launch of this index will allow the market, for the first time, to access a quantitative climate risk assessment for sovereign debt,” stated Waqas Samad, Director of Information at the London Stock Exchange Group, which also owns FTSE Russell.
“Investors can now incorporate climate change risk considerations into their fixed income portfolios, and this could also inform their engagement with sovereigns.”