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Bloomberg Launches Climate Tilted Bond Indices for Fixed Income Investors.

Bloomberg has introduced the Bloomberg Government Climate Tilted Bond Indices, a fresh set of benchmark indices designed for government bond investors interested in participating in the shift towards a low-carbon economy.

These indices offer investors exposure to Bloomberg’s primary fixed income benchmarks while emphasizing countries committed to climate transition goals.

Like all Bloomberg Indices, the Government Climate Tilted Bond Indices can be utilized for benchmarking, asset allocation, and creating new financial products.

According to Bloomberg, the aim of the Bloomberg Government Climate Tilted Bond Indices is to find a balance between dealing with risks and chances linked to climate change while ensuring that the benchmarks accurately represent market trends and risks.

“The newly launched Bloomberg Government Climate Tilted Bond Indices are designed to consider not only a country’s progress against its climate ambitions, but also forward-looking measures of outlook, including investment in renewable energy capacity,” said Chris Hackel, Head of Sustainable Indices, Bloomberg Index Services Limited. “We’re excited to continue our collaboration with Bloomberg Sustainable Finance Solutions and BNEF to bring innovative solutions to the market that meet investors’ climate objectives across sectors and asset classes.”

These indices use Bloomberg Government Climate Scores, which include various factors and data, to make custom indices that fit specific investor goals. For instance, they can create an index that steadily reduces CO2 emissions each year. Additionally, investors can use these scores and data to find climate-friendly options within larger fixed income indices.

It uses quantitative climate scores developed by Bloomberg Sustainable Finance Solutions (“SFS”) to adjust the weights in Bloomberg Government Bond Indices. By adjusting market value weights according to the Government Climate Score or any of the subscores, the index methodology systematically increases allocation to countries that score higher, relative to their peers, on specific climate-related issues.

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The Bloomberg Government Climate Bond Indices are made from the main Bloomberg Government Bond Indices, which include bonds from both rich and developing countries. These Climate Bond Indices change the weights of the bonds based on how much each country is doing to fight climate change. They also have different versions that focus on specific climate risks and opportunities. Bloomberg Index Services Limited manages these indices and decides which bonds are eligible to be included.

At its launch, the Bloomberg Government Climate Tilted Bond Indices consist of the following 14 indices:

  • 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

Bloomberg’s index team has a successful history of developing top-tier, customized indices across various asset types, such as their renowned fixed income, commodity, and equity indices.

Bloomberg Index Services Limited (BISL) employs an innovative strategy to provide strategic benchmarks, aiding market players in adapting to changing investment requirements.

These indices, seamlessly integrated with other Bloomberg tools, utilize a wide array of reliable data and advanced technology for calculations, analysis, and workflow automation. Additionally, they offer distribution capabilities that can enhance the visibility of our clients’ products.

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