Technology & Data

New Bloomberg Commodity Index Tilts Against Carbon

Financial data provider Bloomberg has expanded its commodities index range by launching a carbon tilted index, designed to provide a reduced carbon profile while maintaining exposure to a diversified universe of physical commodities. The Bloomberg Commodity (BCOM) Carbon Tilted Index overweights commodities with a lower carbon footprint while minimising tracking error to Bloomberg’s flagship BCOM parent index. The approach was developed through collaboration between Bloomberg’s index product and quantitative research teams to find “a strong foundation” for the sector tilting concept underpinning the construction of this index. The index achieves its dual mandate by incorporating data-driven assessments of GHG emissions across the relevant parts of the life cycle of the commodity markets represented in the index, while still adhering to a composition that preserves BCOM sector weights. “There is a growing want to support the transition to a low-carbon economy while remaining aligned with their investment goals across all asset-classes,” said Allison Stone, Head of Multi-Asset Product, Bloomberg Index Services Limited. “Utilising a foundation of Bloomberg carbon research, this index has been constructed using an innovative methodology that speaks to priorities of sustainability and diversification, while still providing the liquidity that commodities investors commonly seek.”

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