Paris-aligned benchmarks

Paris-aligned benchmarks are financial indices designed to align investment portfolios with the climate goals of the Paris Agreement, aiming to limit global temperature rise to well below 2°C, with efforts towards 1.5°C. These benchmarks require a minimum annual decarbonization of 7%, covering Scope 1, 2, and 3 emissions for corporate bonds and sovereign bonds. Corporate indices exclude fossil fuels, maintain sector weights similar to broader markets, and normalize emissions by issuer capital. Sovereign bond indices adjust country weights and emissions by population size to achieve the decarbonization target. These benchmarks guide investment strategies toward climate goals in line with the EU Benchmarks Regulation.