Methodology Change | iClima Global Decarbonisation Enablers Index & iClima Distributed Renewable Energy Index | Effective Date 06/07/2021

Today, on the 02/07/2021, Solactive announces the following one off criteria relaxation to the methodology of the following Indices (the ‘Affected Indices’):

Rationale for Methodology Change

Solactive has determined that the Index Methodology of the Affected Indices are lacking in regard to the appropriate reflection of the objective of the Affected Indices (the ‘Index Objective’). The Index Objective is set to be ESG aligned and represent securities from sectors facilitating CO2 avoidance, for example Green Energy, Green Transportation, etc. Even though the Affected Indices have a focus on Environmental elements, they are lacking a focus on Social and Governance issues, therewith limiting its applicability and alignment with the Index Objective. To avoid greenwashing and make the Affected Indices more closely follow the Index Objective, Solactive AG adds an additional filter to the selection process that filters for a broad spectrum of ESG related topics, in particular with a focus on Social & Governance. This ensures further robustness of the Index Methodology in the application of ESG topics. 

Changes to the Index Guideline

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

From (old version):

“[…]

2.2.             SELECTION OF THE INDEX COMPONENTS

[…]

5. Finally, INDEX COMPONENTS must have a minimum TOTAL MARKET CAPITALIZATION of USD 200 million and must be revenue generating.

(the “Index Component Requirements“)

[…].”

To (new version):

“[…]

2.2.             SELECTION OF THE INDEX COMPONENTS

[…]

5. Index Components must have a minimum Total Market Capitalization of USD 200 million and must be revenue generating.
6. Companies in the Index Universe are subject to a final screening in terms of several indicators that provide additional evidence of relevant sustainability and ESG aspects of their operations, namely in
   1. climate and other environmental related aspects, as well as in terms of
   2. social & employee, respect for human rights, anti-bribery and anti-corruption. The indicators that are exclusionary in nature are those referring to
      1. elimination of all forms of forced and compulsory labour and
      2. effective abolition of child labour (as defined by UN Global Compact).

The non-exclusionary additional indicators are used to reveal the companies with practices that are in line with higher sustainability objectives and the companies that are lagging in specific parameters.

(the “Index Component Requirements“) […].”

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.