Morningstar, Inc., a leading provider of independent investment research, today announced the Morningstar Low Carbon Risk Index Family, a new group of indexes that provides diversified exposure to equities across regions and emphasizes companies aligned with the transition to a low-carbon economy.
Powered by Sustainalytics’ Carbon Risk Ratings, the indexes are created through an optimization process that targets low portfolio-level carbon risk and fossil fuel exposure. “Climate change is a significant challenge that impacts investors,” said Sanjay Arya, head of Indexes at Morningstar.
“This new family of indexes will empower investors to evaluate and invest in companies that are adapting to the low-carbon economy and managing their businesses strategically for the long term. Whether motivated by environmental concerns, fiduciary obligations or investment outcomes, I believe the new indexes offer more options to lower carbon exposure without compromising returns.”
A new white paper, “ Preparing for a Low Carbon Economy: Investing in the Era of Climate Change ,” explains how the Morningstar Low Carbon Risk Index Family addresses the urgency around climate change by emphasizing companies aligned with the transition to a low-carbon economy. Not only do the indexes reflect lower climate-related risks, they also exhibit attractive investment attributes.