A portfolio’s decarbonization becomes more difficult once an emissions reduction of 60% is achieved, as high-emissions sectors become depleted. Thereafter, the portfolio construction approach — whether exclusion or optimization — will make a difference to the resulting tracking error and size of the portfolio.

Eight STOXX Thematic indices underlying ETFs in Europe had their annual rebalancing in June, with six of them seeing updates to the business sectors associated with the targeted theme. The ‘purity’ ratio, or theme-related revenue, remains above 80%.

The fight to preserve our nature’s systems is intensifying, presenting both additional risks and opportunities for investors. The ISS STOXX Biodiversity indices offer a multi-step framework to address biodiversity challenges while employing state-of-the-art datasets.