Morningstar EU Climate Enhanced Indexes
Manage Transition Risk with Scalable, Benchmark-Aligned Climate Indexes
Key Features
Morningstar EU Climate Enhanced Indexes
Built for climate transition risk and regulatory alignment—without compromising portfolio discipline.
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| Compliant with EU Benchmark Regulation Aligned with EU CTB and PAB minimum standards, providing a robust and transparent benchmark foundation for managing transition risk within sustainable portfolios. |
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| Preserves diversification relative to the parent benchmark Powered by the Morningstar Global Industry Standard Risk Model, constrained optimization is applied to reduce carbon risk and emphasize companies with lower carbon intensity while minimizing tracking error and adhering to strict exclusion criteria. |
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| Underpinned by Morningstar Sustainalytics Leverages a single in-house ESG & climate data provider with market leading regulatory solutions and climate expertise for carbon emissions, product involvement, global standards screening, and ESG controversy data. |
ANALYSIS
Climate Benchmarks in Practice: Meeting Evolving Investor Needs
This paper analyses the Morningstar EU Climate Enhanced Index Series, which includes PAB and CTB indexes across performance, volatility, factor exposures, and tracking-error drivers, highlighting key methodological choices and how they shape portfolio outcomes.
Morningstar Sustainalytics is a leading ESG research, ratings and data firm that supports investors around the world with the development and implementation of responsible investment strategies. For nearly 30 years, the firm has been at the forefront of developing high-quality, innovative solutions to meet the evolving needs of global investors. Today, Morningstar Sustainalytics works with hundreds of the world’s leading asset managers and pension funds who incorporate ESG and corporate governance information and assessments into their investment processes. The firm also works with hundreds of companies and their financial intermediaries to help them consider sustainability in policies, practices, and capital projects. With 17 offices globally, Morningstar Sustainalytics has more than 1,800 staff members, including more than 800 analysts with varied multidisciplinary expertise across more than 40 industry groups.
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