Press release
Willis Towers Watson and Qontigo launch pioneering STOXX global index series that quantifies companies’ climate transition risk
Enables investors to address financial risk to company share prices caused by a climate transition by building balanced, mainstream, Paris-aligned
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[{"type":"text","content":"Enables investors to address financial risk to company share prices caused by a climate transition by building balanced, mainstream, Paris-aligned portfoliosInnovative, proprietary approach looks beyond simple strategies such as carbon exposure Major market innovation for CoP26 private finance agenda ARLINGTON, Va., Oct. 11, 2021 (GLOBE NEWSWIRE) -- Qontigo and Willis Towers Watson launched an innovative family of climate transition indices driven by a next generation methodology that directly quantifies the impact of a Paris-aligned climate transition on equity valuations. The STOXX Willis Towers Watson Climate Transition Indices (CTI) help investors, governments and companies to manage risk, capture opportunities in their portfolios, align with goals of the Paris agreement and work toward net-zero targets. The CTI enables a more sophisticated way of managing climate risk that looks beyond carbon emissions, by making a forward-looking, bottom-up evaluation of transition risk and opportunity for each company. A proprietary Climate Transition Value at Risk (CTVaR) measure analyzes the impact on projected company cash flows of moving from a business-as-usual scenario — reflecting current policies — to a world where emissions pathways are fully aligned to the goals of the Paris agreement. By incorporating climate risk explicitly, this innovative approach allows investors to allocate in a robust, transparent and low-cost manner toward firms that will build — and benefit from — a future global economy that values and manages climate risks. “Investors need a robust framework that can quantify and incorporate the financial impact of climate risk, but this is something that just hasn’t been widely available until now,” said Craig Baker, global chief investment officer, Willis Towers Watson. “We believe understanding this transition, through our Climate Transition Value at Risk methodology, should be one of the biggest sources of alpha across all asset classes over the next few years. Climate change is a systemic, urgent global challenge and will significantly disrupt capital allocations and returns.” “By curating data from multiple sources, the CTI takes a unique approach from our perspective by refreshing forward-looking company transition risk over time rather than simply using historic carbon emissions data,” said David Nelson, senio...
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