Euronext has created a new environmental index available for French investors to access through structured products.
The Euronext CDP Environment France EW Decrement 5% (FRENV) index will select 40 out of 120 stocks from the French stock market SBF120 that have the best environmental score.
The score is an average of a company’s annual performance for its disclosures on climate change, water security, and deforestation through non-profit climate research provider, CDP.
The index will be licensed to Goldman Sachs which will allow its clients to invest in the index through structured autocallable products.
Autocallable products can automatically mature before their maturity date if pre-determined conditions are met by the underlying asset.
CDP Europe’s director of investor engagement, Laurent Babikian, said: “This index – a global first in its environmental scope – marks a major milestone in delivering a selection of France’s biggest corporates who outperform the market across three critical themes of climate change, water, and forests”.
The index follows the French Financial Markets Authority’s introduction of rules that define conditions that allow the distribution of complex environmental, social, and governance (ESG) index-linked financial instruments from professionals to non-professional investors.