CHAPTER 26

ESG and Climate Indexes: The Latest Trends

From exclusions to Paris-aligned benchmarks, transition and impact

Opening question

“My bank's 'ESG' fund changed its name last year and now follows a 'Paris-aligned' index. Is that progress, or just new words on the same old portfolio?”

In this chapter

Where ESG indexing stands after the first year of net outflows
The European reset: climate benchmarks, fund names, ESG ratings and the SFDR review
The global spread of ISSB disclosure, including in Asia
How Paris-aligned and transition indexes work, with a worked example of WACI and a 7% decarbonisation path
Transition, climate-solutions, nature and impact indexes
Gender-equality indexes, from the IFRC WOMEN CEO indexes to women on boards
Why ESG ratings disagree and what that does to index composition
Green-bond indexes and ESG in fixed income
A checklist for evaluating any ESG or climate index

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This chapter is in the full book

Chapter 1 is free to read online. The full text of chapter 26 — with its tables, figures, worked examples and practice lab — is available in the complete edition of Index Investing: From Theory to Practice (Volume 1, NXW Investment Library).

Read Chapter 1 free Get the full book — contact@nxw.vn

Sections of this chapter

26.1 Where ESG indexing stands in 2026

26.2 The regulatory reset in Europe

26.3 Disclosure goes global: ISSB and the new data

26.4 Paris-aligned and climate transition indexes

26.5 Transition and climate-solutions indexes

26.6 Nature, social and impact indexes

26.7 ESG data and ratings divergence

26.8 Fixed income: ESG and green-bond indexes

26.9 ESG indexes in Asia and emerging markets

26.10 How to evaluate an ESG or climate index

← Chapter 25: Index Platforms in the Cloud Chapter 27: Climate Risk, Weather and Catastrophe Indexes →