Case Study
Creating a custom sustainable index
Euroclear Pension Fund OFP
Impact Cubed created a bespoke index designed to increase the ESG ambitions of Euroclear's european pension fund. Our sustainable index improves upon 15 ESG factors vs. MSCI World Paris Aligned benchmark, giving more impact per unit of tracking error than the MSCI PAB.
Background: The Pension Fund sought to:
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Enhance its ESG strategy, aiming for a customised solution that aligned with its plan members’ specific sustainability goals.
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Meet ambitious climate objectives while maintaining fiduciary responsibilities – something they couldn't do with existing off-the-shelf benchmarks
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Maintain its passive approach to investing
Solution: Using our 3D approach to sustainable investing, we constructed the 'Impact Cubed SmartESG Global Sustainability Index’, which was designed to overcome the limitations of generic ESG and climate-aligned indices.
SmartESG enabled the tailoring of ESG impact to harmonise with the fund's unique values and goals – namely a significant reduction in scope 1&2 carbon intensity and reducing water use & waste generation – all without increasing tracking error.
Outcomes:
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No change in tracking error: The index maintained superior impact performance across multiple ESG factors with minimal tracking error, demonstrating the effectiveness of Impact Cubed's investment solutions capabilities.
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Environmental benefits: The index delivered substantial environmental improvements, including up to 90% reduction in carbon emissions, freshwater usage, and waste generation.
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Revenue growth from sustainable activities: 23% of the holding's revenues came from environmentally positive activities, marking a significant progression from standard benchmarks.
Aston Chan - Head of Investment Solutions
SmartESG was able to improve on MSCI Paris Aligned across 15 ESG factors, for the same level of tracking error as the fund had previously.
Why
Impact Cubed
Built on quantitative, factor data
We only provide outcome-based, factual data – not sentiment or policy. Factorised data forms the foundation of our offering and enables enhanced portfolio construction and engineering.
All our data is therefore quantitative, offering unrivalled flexibility, precision and easier integration.
Built by investors for investors
We harness our team’s direct experience in sustainable investing and portfolio construction, and craft our solutions in consultation with leading institutional investors.
Every aspect of our offering is engineered with portfolio investment at its core, with data meticulously factorised for seamless integration.
