Climate Flag unveiled by SIX for spotlighting stocks that adhere to Paris Agreement norms
The SIX Swiss Exchange, a major European stock exchange and financial services provider, has taken a significant step forward in its sustainability strategy by introducing the 'SIX 1.5°C Climate Equity' flag. This new flag is designed to help investors identify companies that are aligned with the Paris Agreement's goal of limiting global warming to 1.5°C above pre-industrial levels.
The concept for the flag was developed after extensive discussions with listed companies, audit and legal firms, sustainability experts, and industry associations. The criteria for the flag are based on established sustainability standards and reflect scientific consensus on climate change.
To earn the flag, companies must undergo a three-part assessment. First, they must demonstrate that over 50% of their revenues and investments contribute to the objective of limiting global warming to 1.5°C. Second, the assessment evaluates the alignment of their entire value chain with the 1.5°C goal. Lastly, the assessment verifies the credibility of their emissions targets.
The flag requires confirmation from approved reviewers such as S&P or SGS and needs to be renewed annually. It is intended to support investors in making more informed decisions by reducing uncertainty around a company's current and future climate emissions trajectory.
Switzerland is considering a closer alignment with the European Sustainability Reporting Standards and the International Sustainability Standards Board (ISSB) for its own climate-disclosure rules on a national level. While the data provider did not disclose which companies would opt to apply for the flag status, a number of companies have already shown interest.
Bjørn Sibbern, Global Head Exchanges at SIX, stated that the new flag is designed to enhance the visibility and reputation of companies that are taking active steps towards a sustainable future. He believes that this initiative will foster a more responsible and sustainable economy.
As the world continues to grapple with the challenges of climate change, initiatives like the 'SIX 1.5°C Climate Equity' flag are crucial in guiding investors towards companies that are committed to reducing their carbon footprint and contributing to a more sustainable future.
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