Bloomberg announced the launch of the Bloomberg Government Climate Tilted Bond Indices, which are a new set of benchmark indices for government bond investors who want to be involved in the transition to a low-carbon economy. These indices provide exposure to Bloomberg’s fixed income benchmarks, with a greater emphasis on countries that are working towards climate transition objectives.
The indices adjust the weights of countries in Bloomberg Treasury and Sovereign indices based on Bloomberg Government Climate Scores (GOVS), which evaluate how prepared a government is for the transition to a low-carbon world using clear, data-driven indicators. The GOVS scores, provided by Bloomberg Sustainable Finance Solutions and informed by Bloomberg’s BloombergNEF (BNEF) data, consist of three equally important pillars: Carbon Transition, Power Sector Transition, and Climate Policy.
“The recently launched Bloomberg Government Climate Tilted Bond Indices are designed to take into account not only a country’s progress towards climate goals, but also future-oriented measures, such as investment in renewable energy capacity,” stated Chris Hackel, Head of Sustainable Indices, Bloomberg Index Services Limited. “We are excited to work with Bloomberg Sustainable Finance Solutions and BNEF to offer innovative solutions to investors that align with their climate goals across different sectors and asset classes.“
The Bloomberg Government Climate Tilted Bond Indices aim to balance the consideration of climate-related risks and opportunities while maintaining benchmarks that accurately represent market liquidity and concentration risks. The Bloomberg Government Climate Scores, along with the underlying pillars and factor data, can be used to create customized indices that meet specific portfolio objectives for investors. For instance, an index that achieves a minimum reduction in CO2 emissions along a fixed decarbonization path from one year to the next. Additionally, the scores and data can be utilized by investors who are looking for climate solutions within broader aggregate style fixed income indices.
The Bloomberg Government Climate Tilted Bond Indices comprise 14 indices at launch:
- Global Treasury Climate Tilted Bond Index
- Pan-Euro Treasury Climate Tilted Bond Index
- Euro Treasury Climate Tilted Bond Index
- Emerging Markets Local Currency Government Climate Tilted Bond Index
- Emerging Markets Local Currency Government Climate Tilted 10% Country Capped Index
- Emerging Markets Local Currency Government Universal Climate Tilted Bond Index
- Global Inflation-Linked Climate Tilted Bond Index
- Pan Euro Inflation-Linked Climate Tilted Bond Index
- Eurozone-Euro CPI Inflation-Linked Climate Tilted Bond Index
- Eurozone-All CPI Inflation-Linked Climate Tilted Bond Index
- Emerging Markets Hard Currency Sovereign Climate Tilted Bond Index
- Emerging Markets USD Sovereign & Sovereign Owned Climate Tilted Bond Index
- Emerging Markets USD Sovereign Climate Tilted Bond Index
- Emerging Markets Pan-Euro Sovereign Climate Tilted Bond Index
As like all Bloomberg Indices, the Government Climate Tilted Bond Indices are accessible for benchmarking, asset allocation and product creation intentions.
