“Investors are clearly allocating significantly more to alternative asset classes to diversify their portfolios. That’s why we are moving into an investment segment that’s increasingly gaining a foothold in portfolios. With Bitcoin Suisse, we do this with an established partner and with an index methodology designed to meet the robustness needs of today’s investors.”

Axel Lomholt, General Manager at STOXX

The STOXX Digital Asset Blue Chip Index tracks a diversified and high-quality basket of assets, utilizing crypto-native metrics to select those which serve as a reflection of the crypto universe today. The list of eligible tokens is derived from all assets classified under the Bitcoin Suisse Global Crypto Taxonomy (GCT). Selection is based on a multi-step procedure which seeks to identify the strongest and most representative assets in each eligible sector. A market capitalization weighting scheme with a cap of 30 percent limits exposure to typically dominant tokens such as Bitcoin and Ethereum.

“With its maximum weighting limit of 30 percent for any individual crypto underlying, the new ETP is as unique vehicle to enter into the crypto world with just one position in your portfolio.”

Marco Infuso, Chief Sales Officer of Valour

“With the launch of this unique blue chip crypto index in collaboration with STOXX, we are taking the next step in the development of our digital assets offering. With its rule-based asset selection, the STOXX Digital Asset Blue Chip Index is Europe’s first investment alternative to pure top market cap crypto asset strategies. Bitcoin Suisse is proud to partner with STOXX to drive innovation further in the crypto- and traditional space.”

Andrej Majcen, Chief Executive Officer at Bitcoin Suisse

About STOXX 
STOXX^® and DAX^® indices comprise a global and comprehensive family of more than 17,000 strictly rules-based and transparent indices. Best known for the leading European equity indices EURO STOXX 50^®, STOXX^® Europe 600 and DAX^®, the portfolio of index solutions consists of total market, benchmark, blue-chip, sustainability, thematic and factor-based indices covering a complete set of world, regional and country markets. STOXX and DAX indices are licensed to more than 550 companies around the world for benchmarking purposes and as underlyings for ETFs, futures and options, structured products, and passively managed investment funds. STOXX Ltd., part of the ISS STOXX group of companies, is the administrator of the STOXX and DAX indices under the European Benchmark Regulation. 

About ISS STOXX
ISS STOXX GmbH, through its group companies, is a leading provider of comprehensive and data-centric research and technology solutions that help capital market participants identify investment opportunities, detect qualitative and quantitative portfolio company risks, and meet evolving regulatory requirements. With roots dating back to 1985, we today deliver world-class benchmark and custom indices across asset classes and geographies and serve as a premier source of independent corporate governance, sustainability, cyber risk, and fund intelligence research, data, and related offerings. Our products and services give clients the scale and leverage they need to grow their business more effectively and efficiently. ISS STOXX, which is majority owned by Deutsche Börse Group, is comprised of more than 3,400 professionals operating across 33 global locations in 19 countries. Its approximately 6,400 clients include many of the world’s leading institutional investors who turn to ISS STOXX for its objective and varied offerings, as well as companies focused on ESG, cyber, and governance risk mitigation as a shareholder value enhancing measure. Clients rely on ISS STOXX’s expertise to help them make informed decisions to benefit their stakeholders. 

Legal disclaimer: 
STOXX Ltd., ISS STOXX GmbH, ISS STOXX Index GmbH, Deutsche Börse Group and their licensors, research partners or data providers do not make any warranties or representations, express or implied, with respect to the timeliness, sequence, accuracy, completeness, currentness, merchantability, quality or fitness for any particular purpose of its index data and exclude any liability in connection therewith. STOXX Ltd., ISS STOXX GmbH, ISS STOXX Index GmbH, Deutsche Börse Group and their licensors, research partners or data providers are not providing investment advice through the publication of indices or in connection therewith. None of their products or services recommends, endorses, approves or otherwise expresses any opinion regarding any issuer, securities, financial products or trading strategies. In particular, the inclusion of a company in an index, its weighting, or the exclusion of a company from an index, does not in any way reflect an opinion of STOXX Ltd., ISS STOXX GmbH, ISS STOXX Index GmbH, Deutsche Börse Group or their licensors, research partners or data providers on the merits of that company and may not be relied on as such. Financial instruments based on the STOXX^® indices, DAX^® indices or on any other indices supported by STOXX are in no way sponsored, endorsed, sold or promoted by STOXX Ltd., ISS STOXX GmbH, ISS STOXX Index GmbH, Deutsche Börse Group or their licensors, research partners or data providers. 

As of Monday, March 18, 2024, the DAX Equity Indices^[1] will adopt new rules, mainly related to the treatment of corporate actions. Among other changes, the indices‘ calculation formula will also be revised, and the weight cap on constituents will be raised.

The biggest rules reform since the inception of DAX in 1988 was designed to bolster the quality of member companies and bring selection criteria in line with international standards, ensuring the indices remain fit for purpose in a changing financial landscape. This sustained evolution also saw the flagship DAX benchmark grow from 30 to 40 constituents in 2021. The new treatment of corporate actions will further benefit users by facilitating and lowering the cost of index replication.  

Methodology and calculation changes

As of March 2024, the DAX Equity Indices will be calculated under the STOXX calculation framework, triggering changes to the treatment of corporate actions.

In the most significant change, dividends will now be reinvested in the whole index portfolio rather than in the distributing stock. There will also be changes to the treatment of shares that are subject to a tender offer, benefiting investors with a clearer process timeline that makes the index more predictable. Further changes will be implemented to the determination of stocks’ free floats, as well as the threshold for extraordinary free float adjustments.

Additionally, the index calculation formula will move from a so-called correction factor-based methodology to a divisor-based scheme. Consequently, changes in the number of shares due to corporate actions will be reflected immediately rather than carried over to the next regular index review.

For a detailed list and explanation of all rules and calculations changes, please click on the documents below:

• Overview of Methodology Changes
• DAX Equity Index Methodology
• DAX Equity Index Methodology Changes
• DAX Equity Index Calculation Guide
• DAX Equity Index Calculation Changes

Data system migration: standardization and accessibility

Another key change in the DAX world will also take place next March, when the distribution of data for DAX Equity Indices will migrate to the system currently used by STOXX indices. This will ensure a better operational experience for subscribers of both DAX and STOXX data, offering single-point access to reports that are aligned in structure and content. STOXX constantly upgrades its platforms to match markets’ and clients’ demand for integrity, governance, surveillance and stability.

To create a smooth transition and help DAX index licensees familiarize themselves with the new Index Data Distribution System, STOXX will run a simulation phase between December 18, 2023, and February 29, 2024, during when it will release daily DAX data reports on the new system alongside the existing one (MD+S). 

Only test data will be released over the new distribution system during the simulation period. Real data will remain available only on the incumbent system until the end of February.

Further information on the new distribution system and files format is available in the following documents:

• Overview of technical migration, and file name and format change
• DAX Equity Indices Simulation Phase Announcement
• Index Files Guide

Ongoing evolution

The work to modernize the DAX indices isn’t over, as STOXX continues to meet investors’ progressing needs and demands. Following a market consultation, STOXX announced on November 22 that the DAX indices’ weight cap for individual constituents will be raised from 10% to 15% as of March 2024, reflecting “a wide range of considerations from different stakeholders” and aligning the index with international practices. 

^[1] For a complete list of impacted indices, please click here.

This was a good opportunity for us to speak with Stephan Leithner, member of the Executive Board and responsible for Pre- & Post-Trading businesses at Deutsche Börse Group, and with Axel Lomholt, General Manager at STOXX.

We got the two executives’ impressions on the growth trajectory of the index business in the last 25 years and the role of indices in changing financial markets. We also asked them what lies ahead for an indexing industry immersed in full transformation.

_{Stephan Leithner and Axel Lomholt}

Stephan: “We are very proud of the long tradition at STOXX. For Deutsche Börse’s indexing business, the next phase started with the recent merger between ISS and STOXX. The newly combined ISS STOXX is being brought in with SimCorp, the leading front-to-back investment process technology provider, under a unique Investment Management Solutions segment at Deutsche Börse. The combination of ISS’s quality ESG data and research and STOXX’s indexing expertise will enable us to provide clients with a comprehensive offering addressing key investment themes.

Speaking of ESG data, sustainability is a key megatrend that will continue to fundamentally change the investment business over the coming years. The market landscape is also moving towards more regulation, which in turn leads to increased securitization, enhanced transparency and standardization. Even though the geopolitical environment has become more complex, we think that markets will get even more globalized. Indices are key to that transition. Investors want transparent, liquid and cost-efficient alternatives for investments, and risk management continues to be front-of-mind.” 

Axel: “The indexing space has been transformed radically in the last 25 years, and the acceleration in change witnessed most recently is an indication of what’s to come. 

On the one hand, the growth of sustainability, thematic and factor-based strategies is likely to extend beyond what we’ve seen so far. And that is where we have invested a lot of our time and effort, with no detriment to the benchmarks segment, which continues to be a mainstay in investment markets.

On the other hand, we believe that technology will keep driving innovation. For index providers, this means more sophisticated data inputs and advanced index design techniques. While equity prices were the main data required for index construction years ago, other sources are now common, including companies’ revenues, patents, factor signals and sustainability scores. With our in-house and partner research teams, we have taken those inputs to come up with novel products. At the same time, the ever-larger potential of artificial intelligence is pushing the boundaries of intelligent index construction. Yet, despite these breathtaking advances, our guiding principles at STOXX remain unchanged: to provide rules-based, transparent, representative and investable indices.”

Stephan: “And this, in the light of increasing regulation, is more important than ever. STOXX is best known for its EURO STOXX 50 and DAX benchmarks, which are truly iconic in financial markets. The EURO STOXX 50 is the heartbeat of the Eurozone’s equity markets, and lies at the center of a comprehensive tradability ecosystem, whose ETFs, futures, options and structured products are among the world’s most popular. But the conversation on indices has moved to more innovative themes and methodologies, and I’m thrilled that the STOXX brand is associated with them.” 

Axel: “I’ll mention some of those solutions. This year we launched the ISS STOXX^® Biodiversity indices, which showcase the complementary work we can accomplish with ISS. The multi-modal set tackles nature-related risks and opportunities through a comprehensive approach that excludes companies that negatively impact biodiversity, and provides exposure to companies aiding our natural capital.

In 2019, Europe’s first sustainability-focused derivatives were listed with futures on the STOXX^® Europe 600 ESG-X. Together with our partners at Eurex and some of the world’s most forward-thinking clients, we introduced those contracts with the conviction that flows will move from traditional market cap-weighted indices to sustainable strategies. Today, with over 1 million contracts traded so far in 2023, that belief stands as strong as ever.

And we have been busy in our benchmarks segment as well. In 2022 we launched the STOXX World Indices, a suite that allows investors to slice and dice the world’s equity markets in a modular way, with a consistent methodology and international standards.

With that index framework we designed the iSTOXX^® World Min Vol ESG index for a large UK manager. At the center of this sustainable, factor-based index solution is an optimized systematic process that balances multiple investment objectives and considerations.

And we remain in execution mode with a myriad of super exciting projects on the horizon. I could go on, but I would take your entire evening.”

Stephan: “Most of those solutions were born out of a client need and of close cooperation. And our clients’ goals and requirements are changing too. As their strategies evolve, I see the index business as a facilitator as well as a risk manager to help them accomplish those goals. STOXX helps them deliver better and smart outcomes, and enable them to optimize their returns as well as their impact.” 

Axel: “One the major forces for change over the past few years is that clients want to co-develop indices and, as a result, customization has become our ‘secret sauce’. We hear from these clients that they highly value the accuracy and reliability of our indices, and the flexibility with which we tackle each project allowing them to tailor solutions for their investors. We want to continue being known for that.”

Stephan: “On the product side, there will be a massive transfer of wealth to a younger, tech-savvy and sustainability-conscious generation. Beyond the broader active-to-passive trend, there are specific drivers of growth for our index business. These include strong thematic-investing trends, a vibrant structured-products market, and sustainability disclosure regulation. Beyond the ESG space already discussed, there are additional growth drivers in segments including fixed income, alternative assets, private markets and digital assets. It truly is a multi-faceted growth story.”

Axel: “Without a doubt, ETFs have been the standout protagonists in the modernization of markets in recent years, and I suspect that that role will stay. But newer products such as total return futures, active ETFs, daily options, etc., will add to the impulse. STOXX is leader in some segments and geographies, and a challenger in others. That requires us to stay competitive, anticipate changes, and make informed decisions.”

Stephan: “The indexing boom has blurred the lines between active and passive investing, and investors can now access the most differentiated strategies through systematic, index-based approaches. This has brought incredible benefits for investors, and STOXX can be proud to have been part of that transformation.” 

Axel: “If the recent evolution has taught us one thing is that time spent on the active-vs.-passive debate is no longer time well spent. Instead, clients have moved on and now want to discuss what the right alternative is in terms of building a holistic, broader strategy, spanning across several asset classes and both active and passive approaches.”

Stephan: “The index industry has shown robust development and financial performance through the ups and downs of the pandemic and the shift in the interest-rate cycle. Further back, we have had a front-row seat in the fantastic transformation of financial markets of the last 25 years. I, personally, couldn’t be more excited about what lies ahead.”

Our company started operations in 1998 with the launch of the EURO STOXX 50^®, as electronic trading of equities and derivatives was gathering pace, and the introduction of the euro was still nearly a year away. The index quickly became the undisputed benchmark for Eurozone blue-chips and a barometer for the region’s economic fortunes. The creation of this benchmark and of its pan-European sibling, the STOXX^® Europe 50, would pave the way for the launch in April 2000 of Europe’s first ETFs, listed at the Frankfurt Stock Exchange. 

Today, we calculate more than 17,000 rules-based and transparent indices under the STOXX and DAX brands, licensed to more than 550 companies globally. These indices are used for benchmarking purposes by the world’s largest investment institutions. They also underlie some of the most liquid futures and options. And they’re the top choice for issuers of structured products.  

Since day one, our indices gained rapid adoption due to their strictly rules-based and reliable methodologies. We have built a robust legacy with the most widely traded European benchmarks, whose unique and extensive ecosystem of funds, listed derivatives and structured products helps investors efficiently hedge and manage portfolios. 

We are the No.1 provider of underlyings for equity index contracts at Eurex, the largest European derivatives exchange. Today, over 3 million contracts on STOXX and DAX indices change hands per day at the exchange, allowing market participants of all sizes to achieve their desired exposures and manage their investment liquidity.

European heritage, global footprint

Through the ups and downs of the European economy over the past 25 years, the EURO STOXX 50, STOXX^® Europe 600 and DAX^® tracked the fate of the region’s largest companies. Our indices quickly acquired a global footprint, too: the STOXX^® Global 1800 Index became a popular benchmark, and in 2022 we introduced the STOXX World Equity indices. This new suite allows investors to slice and dice the world’s equity markets in a modular way, with a consistent methodology and international standards – leaving no coverage gaps or overlaps.

Sustainability moves to the fore

We have also expanded to sector, volatility, dividend and smart-beta strategies, developing some of the most groundbreaking indexing solutions.

Excitingly, the pace of innovation hasn’t slowed down, as seen with new factor-based and thematic index offerings. And increasing demand for responsible investing has led to the introduction of a comprehensive family of ESG & Sustainability indices that cater to diverse objectives. The indices have gained huge traction with investors and issuers in the past decade, and will continue to do so as regulators, investors and pensions trustees raise the bar on issues from climate to biodiversity and human rights. 

The EURO STOXX 50^® ESG, for example, is a variant of our flagship Eurozone index that incorporates ESG exclusions and a best-in-class strategy. In July, BlackRock unveiled an iShares ETF that replicates the index. This is the latest addition to a pioneering responsible-investing segment, which already yielded the industry-first regional sustainability-focused futures, tracking the STOXX^® Europe 600 ESG-X index, in 2019. 

New technologies

As our products have evolved, our role as a company has changed along the way. Thanks to the explosion in alternative data that few imagined 25 years ago, and the consequent growth in systematic and quantitative investing, STOXX is not just an index provider, but an intelligent investments hub and innovation center.

Innovation has broadened our possibilities, enabling “smart” indices that fit bespoke mandates. With access to the most nuanced data from leading providers, and deep risk and factor exposure analysis from our partners at Axioma, we enable users to optimize their indexed portfolios — controlling for risk, returns and sustainable impact. The extraordinary progress of artificial intelligence this decade has expanded our capabilities in portfolio construction and stock selection.

Yet our mission hasn’t changed: to design powerful products, partnering with investors to tackle with precision their very specific challenges and opportunities in an ever-interconnected global economy. An open architecture that allows us to team up with the best data providers for each case gives us an edge that many of our competitors don’t have. That’s what we hear from clients and partners: they appreciate that we adapt to their needs but at the same time we uphold the accuracy, reliability and neutrality of our indices — from design to maintenance. Despite their inventiveness, all of our index solutions remain representative of the underlying market, transparent and tradeable. 

While we are a leader in many segments and regions, we are a challenger in others. This requires us to stay competitive, anticipate changes, and make informed decisions. Being flexible in our offerings, adapting our products and considering clients’ unique needs are fundamental. 

Combination with ISS 
Just a few days ago, we took another step in our ongoing transformation journey. Our parent company, Deutsche Börse, has combined STOXX with Institutional Shareholder Services (ISS), a leading provider of ESG data, analytics and insight. STOXX and ISS have been close partners for many years, and the combination of sophisticated index know-how, market intelligence and ESG data is a perfect fit.  

Under the ISS STOXX umbrella will sit the STOXX index business together with ISS Governance, ISS ESG, ISS Corporate Solutions and ISS Market Intelligence. Combining ISS’s robust and varied ESG and governance datasets with STOXX’s deep expertise in index construction will significantly strengthen the overall offering of solutions and enhance the possibilities for clients. 

When passive investing turns active 

Our growth has come alongside the multi-decade boom in index investing. The adoption of index-based vehicles such as ETFs has been underpinned by the multiple benefits of low cost, transparent methodologies and rules, as well as intra-day pricing and trading. Those features have made of the ETF the most efficient and favored instrument for direct investments. From a low base two decades ago, assets under management in ETFs now represent 29% of investments in active mutual funds. If one adds index-tracking mutual funds, the ratio climbs to 50% of capital invested in active funds.  

At the same time, targeted strategies and customization mean that indices increasingly provide an active rather than passive investment option. The expanding functionality of such indices is likely to keep lifting the ETF universe to greater trading volumes and assets under management. 

The ETF space will continue to grow as it finds new markets and applications. The objectives, construction and uses of our indices will keep changing. But whatever new products emerge, STOXX will be at the front line of change.

If the pace of change since 1998 is any guide, the next 25 years promise to bring even more innovation to the world of STOXX indices. We look forward to the next step in this journey with our clients, partners and stakeholders in the public markets.

Under the ISS STOXX umbrella will sit the STOXX index businesses (which includes STOXX and DAX indices), as well as ISS’ four existing business lines: ISS Governance, ISS ESG, ISS Corporate Solutions, and ISS Market Intelligence. Combining ISS’ robust and varied ESG and governance datasets with STOXX’s deep expertise in benchmark and custom index construction, as well as index production and operations, will allow ISS STOXX to compete effectively and on a global basis with all index providers.

“As we continue to expand our core offerings, STOXX will provide an additional pillar to accelerate the growth of our company through increased scale and diversified opportunities. We will now also be positioned to provide clients greater and more innovative insights for portfolio construction, passive and custom index creation, and portfolio tracking as part of an integrated solution set.”

ISS STOXX CEO, Gary Retelny

ISS STOXX, which is majority owned by Deutsche Börse Group, will be comprised of more than 3,400 professionals operating across 33 global locations in 19 countries. Its approximately 6,400 clients include many of the world’s leading institutional investors who turn to ISS STOXX for its objective and varied offerings, as well as companies focused on ESG, cyber, and governance risk mitigation as a shareholder value enhancing measure. Clients rely on ISS STOXX’s expertise to help them make informed decisions to benefit their stakeholders.

Learn more about ISS STOXX here.

About ISS STOXX
ISS STOXX GmbH, through its group companies, is a leading provider of comprehensive and data-centric research and technology solutions that help capital market participants identify investment opportunities, detect qualitative and quantitative portfolio company risks, and meet evolving regulatory requirements. With roots dating back to 1985, we today deliver world-class benchmark and custom indices across asset classes and geographies and serve as a premier source of independent corporate governance, sustainability, cyber risk, and fund intelligence research, data, and related offerings. Our products and services give clients the scale and leverage they need to grow their business more effectively and efficiently. ISS STOXX, which is majority owned by Deutsche Börse Group, is comprised of more than 3,400 professionals operating across 33 global locations in 19 countries. Its approximately 6,400 clients include many of the world’s leading institutional investors who turn to ISS STOXX for its objective and varied offerings, as well as companies focused on ESG, cyber, and governance risk mitigation as a shareholder value enhancing measure. Clients rely on ISS STOXX’s expertise to help them make informed decisions to benefit their stakeholders.

In particular, the SFDR’s definition of Sustainable Investment (SI) is key for funds seeking to comply with the regulation and meet client expectations. In Article 2 (17), the legislative package provides broad principles of what an SI should be (*), but it does not set specific criteria or quantifiable metrics to define it. 

(*) SFDR definition of SI:

            1. It follows good governance practices

            2. It does no significant harm (“DNSH”) to environmental and social objectives

            3. Investee companies deliver a positive contribution through an economic activity that supports either environmental or social objectives, or both.

To help investors in the construction of portfolios, Qontigo has published a methodology guide for reporting the SI percentage of STOXX and DAX indices. The methodology follows the SFDR definitions, and is based on fundamental choices to identify pragmatic answers, build solutions and maximize robustness in an evolving context.

Methodology choices based on available information

The document highlights some key background elements to understand how the concept of SI is considered under the European regulation. It contains an overview of Qontigo’s methodological approach that allows investments to be classified as sustainable or not, and a more detailed presentation of the individual steps within it. Additionally, it shows how portfolio aggregation of the SI percentage is calculated.

This methodology was developed using a “best efforts” stance. Given the room for interpreting the rules and official guidance, Qontigo has used the most selective criteria and a pragmatic approach in integrating the rules, and our team constantly monitors legislative developments in the field.

Why a clear definition of SI is important

SI, as defined in the SFDR, is a cornerstone of the EU’s sustainable finance regulatory agenda:

• It determines the eligibility of securities to be included in SFDR Art. 9 products.^[1]
• It entails a concept of good governance and DNSH that are part of the exclusion base layer for SFDR Arts. 8 and 9.
• It overlaps with the EU Taxonomy^[2] under development.
• It represents one of three ways in which end investors can express their sustainability preferences under MiFID II.

Figure 1: Common requirements under SFDR, MiFID II and the EU Taxonomy.

_{Source: ‘Qontigo’s SFDR Article 2 (17) Sustainable Investment Methodology,’ April 2023.}

Binary approach

Importantly, Qontigo has taken a “binary approach”^[3] to considering a company as an SI, taking a 20% sustainable revenue alignment threshold at the company level as the determinant factor. The company’s positive contribution will be measured using the United Nations’ Sustainable Development Goals (SDGs) until the Taxonomy is fully developed.

Guiding principles in our methodology

Qontigo used the following guiding principles when developing the SI methodology presented in the document:

• Consistency with the existing reference frameworks for the EU’s SI regulations
• Specificity, so as to reflect the current recommendations in the SFDR as far as possible
• Integrity, to avoid any risk of greenwashing
• Cohesiveness across all indices
• Flexibility, to account for different approaches and evolving regulation. 

Qontigo is committed to updating its methodology as the regulatory environment develops and more data becomes available. We invite you to download the document and share any comments and questions with us.

^[1] For example, SFDR states that Art. 9 financial products “may invest in a wide range of underlying assets, provided these underlying assets qualify as ‘sustainable investments.’”

^[2] The European Commission has defined the Taxonomy as “a classification system, establishing a list of environmentally sustainable economic activities.” 

^[3] A binary approach means a company is (100%) or is not (0%) an SI based on a particular threshold of sustainable economic activity that qualifies it as such. The alternative is to take an “in-part approach,” reflecting the exact share of a company’s economic activity that can be considered as is sustainable.

“We are very glad that we could find consensus with our colleagues in Brandenburg, Hesse and North Rhine-Westphalia to jointly implement a new methodology that incorporates the 1,5-degree-target of the Paris agreement and exclusions for activities with significant harm to EU taxonomy objectives or one of the UN sustainable development goals.”

Dr. Danyal Bayaz, Minister of Finance in Baden-Wuerttemberg

Baden-Württemberg uses the global STOXX ESG Länder PAB Index family in response to the new Sustainable Investment Act that was just passed by the regional parliament.

“Together with Baden-Wuerttemberg, Brandenburg, and North Rhine-Westphalia, we are showing how sustainable investments are possible and that the public sector can and should be a role model and driving force here. With the new Climate Plan Hesse, the Hessian Government has just shown a path on which Hesse can become climate neutral by 2045 at the latest. An important step in following this path are sustainable capital investments.”

Michael Boddenberg, Minister of Finance in Hesse

“We are pleased to further intensify our cooperation with the pension funds of four German states. Our cooperation started in 2019 when we designed four sustainability indices for these funds. With the STOXX ESG Länder PAB Indices they are taking their sustainable commitment even further.”

Axel Lomholt, Chief Product Officer for Indices & Benchmarks at Qontigo

The indices are constructed to follow the EU Paris-aligned Benchmark requirements. This includes the exclusion of companies that are harmful to the environmental objectives of the EU taxonomy. Going beyond the PAB standard, companies are excluded if they significantly obstruct any of the 17 United Nations Sustainable Development Goals. Moreover, the indices avoid investing in ESG-laggards by applying an ESG best-in-class approach. The calculation of these indices also uses Qontigo´s analytics tools to fine-tune the weight of the constituents.