Methodology change | Solactive Just Transition Select Indices | Effective Date 14th February 2025

Today, on the 13/02/2025, Solactive announces the following changes to the methodology of the following Indices (the ‘Affected Indices’):

Rationale for Methodology Change

The current ESG data provider has decommissioned its services. As a result, Solactive has modified the methodology to ensure the index’s continuation while maintaining the integrity of ESG assessments and alignment with the index strategy.

Changes to the Index Guideline

The following Methodology changes will be implemented in the following points of the Index Guideline (ordered in accordance with the numbering of the affected sections):

Section 2.1. INDEX UNIVERSE REQUIREMENTS

From

[…]

– Part of the Just Transition universe as provided by the DATA PROVIDER.

The Just Transition universe is defined by the Data Provider as follows:

A Just Transition score is calculated from 0 to 100 based on different ESG criteria:

• Energy Transition score
• Integration of social factors in the supply chain score
• Promotion of social and economic development score
• Promotion of labour relations
• Responsible management of restructuring
• Career management and promotion of employability
• Respect for human rights standards and prevention of violations
• Respect for freedom of association and the right to collective bargaining

Companies that meet the following criteria, depending on their Carbon Footprint Grade (see below), are included in the Just Transition universe:

• Just Transition score higher or equal to 50 if Carbon Footprint grade is A, B, C
• Just Transition score higher or equal to 60 if Carbon footprint grade is D

[…]”

Additionally, all companies that have a critical controversy in any of the ESG criteria used in the construction of the Just Transition score, or companies that fail to meet the Febelfin (Fédération belge du secteur financier) quality standards on sustainable and socially responsible investment (as published as of the date of this Guideline on https://www.towardssustainability.be/en/quality-standard) are excluded from the Just Transition universe by the Data Provider.

[…]”

To

[…]

– Fulfill the carbon transition requirements as defined below:

I. Carbon Risk Rating higher or equal to 45 and Staff and Supplier Rating percentile score higher or equal to 0.5 if Carbon Footprint grade is A, B, C

II. Carbon Risk Rating higher or equal to 60 and Staff and Supplier Rating percentile score higher or equal to 0.75 if Carbon footprint grade is D

[…]

Additionally, the Index Universe is filtered based on the Norm-Based Research exclusion criteria, which consider factors such as environmental impact, human rights, corruption, and labor rights. Companies that fail to meet the Febelfin (Fédération belge du secteur financier) quality standards on sustainable and socially responsible investment (as available under https://www.towardssustainability.be/en/quality-standard) are also excluded.

[…]

Section 6. DEFINITIONS 

From

“Data Provider” is Vigeo Eiris who provides the universe of companies that are well positioned to benefit from the transition to a low carbon economy. Vigeo Eiris identifies the risks linked to the change in activities due to the climate transition. For more information, please visit: http://www.vigeo-eiris.com/

To:

“Data Provider” is ISS. For more information, please visit: https://www.issgovernance.com/.  

[…]”

“Carbon Risk Rating” is assigned by Data Provider and is based on an assessment of over 100 industry-specific indicators and a carbon risk classification at the industry and sub-industry levels.

[…]”

“Staff and Supplier Rating” is assigned by Data Provider and is based on an assessment of performance across key social sustainability metrics, including freedom of association, equal opportunities, health and safety, work-life balance, employment security, and training and education, as well as supplier standards with regard to labor rights and working conditions.

[…]” 

Defined terms used in this announcement, but not defined herein, have the meaning assigned to them in the respective index guideline of the Affected Indices. The amended version of the index guideline will be available on the effective date : 14/02/2025.