FTSE Russell Launches FTSE Canada Sustainable Investment Fixed Income (SIFI) Indexes

Published on: 16 July 2022
by KnowESG
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FTSE Russell, a global index, data, and analytics provider, introduced sustainable fixed income indexes. These allow Canadian investors to calibrate their exposure to fossil fuels as the low carbon transition advances and invest in green and sustainability topics underrepresented by current indexes in the Canadian fixed income market.

The newly launched FTSE Canada Green Impact Bond Index Series and FTSE Canada Universe Ex-Fossil Fuels Bond Index Series use a transparent, rules-based approach to identify and screen issuers, bringing greater consistency across fixed income and offering investors a variety of tools to calibrate portfolio exposure. 

In addition, the indices use a comprehensive, separate methodology to detect issuers' business sustainability activities and exposure to fossil fuels. 

One of the datasets utilised is the Refinitiv Business Classification (TRBC), a flagship sector classification encompassing over 250,000 securities and is currently the most detailed and comprehensive data classification.

The FTSE Canada Green Impact Bond Index Series was created to track the performance of investment-grade, high-yield, and Canadian dollar-denominated (CAD) green debt issued by Canadian governments, government agencies, and corporations. The Index Series assists investors in aligning their portfolios with environmental improvement.

The FTSE Canada Universe Ex-Fossil Fuels Bond Index Series is the first of its kind in the Canadian fixed income market and is designed to track the performance of constituents of the FTSE Canada Universe Bond Index after the exclusion of companies whose revenue and/or reserve exposure to fossil fuels exceeds a predetermined threshold, as investors seek to calibrate their exposure to fossil fuels in their portfolios.

Marina Mets, Head of Americas, Fixed Income and Multi-Asset Index Product Management at FTSE Russell comments: 

“Our new FTSE Canada SIFI indexes address growing client demand for sustainability-focused solutions in the Canadian fixed income market. With rising investor needs for greater choice when it comes to managing fossil fuel exposure in a portfolio, we have developed a thorough and rigorous methodology to enable climate-conscious investors to align their investment strategy, financial interests, and values. We believe green and sustainable investing in the Canadian fixed income market will grow in the coming years as investors look for opportunities in Canada’s transition to a low carbon economy.” 

Source: FTSE Russell

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