According to the statement made by Garanti BBVA, the bank aims to develop the sustainable finance market with the index in question and to encourage companies to increase their transparency about climate risks and opportunities; The calculation method, selection criteria and other rules were determined under the consultancy of Borsa İstanbul and created an index that can form a basis for sustainability and climate finance in Turkey.
The processes of calculating the index, in which the companies to be included in the scope are determined by CDP data, ensuring its continuity and publishing the index data through data distribution companies, are carried out by Borsa İstanbul.
The investment world of the index is made up of companies with B- and higher scores in the CDP Climate Change report, which is processed in Borsa Istanbul. While the burden of the stocks in the index, which will be updated once a year, is determined according to the market price of the stocks in actual circulation, the liquidity rule is also applied in the share selection process. Stocks with a daily average transaction volume of at least 10 million TL or more in the last 6 months are included in the index.
Garanti BBVA Climate Index; It highlights companies that have performed adequately within the scope of the CDP, which is one of the most valuable issues in the field of sustainability, which is under process in Borsa Istanbul, and where companies report within the scope of the effort with climate change. The index measures the price and return performance of the portfolio consisting of the shares of companies that are traded in Borsa Istanbul and that, according to the CDP methodology, declare their risks and opportunities regarding climate change in a transparent form. ,
“We are now on the verge of a turning point”
Garanti BBVA Deputy General Manager Ebru Dildar Edin made the following assessment of Garanti BBVA’s efforts towards sustainable finance:
“In the last 60 years alone, we as humanity have emitted 100ppm of CO2 into the atmosphere. This rate is 100 times faster than previous natural increases, as it accurately occurred at the end of the last ice age more than 10,000 years ago. they claim that means an atmospheric CO2 concentration of no more than 475 ppm for 2 degrees or 425 ppm for 1.5 degrees. If we are still thinking of reaching the 1.5 degrees goal, we only have a budget of 6 ppm globally. We are on the verge of a turning point, and while we are at this threshold, we need to make sure that the next step is in the real direction.We are at a time when we, as the business world, need to take responsibility for the climate emergency and create a new era of beautification with innovative initiatives behind technology that offer compromise opportunities to spread the climate movement across the board.
While many different innovative approaches such as renewable power investments, power efficiency applications and circular economy create millions of new jobs, it is predicted by the World Bank that investments in these areas will reach at least 700 billion dollars per year. ”
“We hope that the index will now encourage companies that have not disclosed their climate change strategies”
Sabancı University Corporate Governance Forum and CDP Turkey Founding Director Melsa Ararat also said the following about the index:
“CDP invites companies to explain their impact on climate change, water security and deforestation to 590 global investor names who manage $110 trillion assets. In 2020, 9,600 companies representing more than 50 percent of the total cost of global markets reported using CDP question sets. This number represented an increase of 70 percent compared to 5 years ago. In recent years, while indices and funds that directly use CDP information have increased all over the world, indices and mutual funds using CDP data, which also take into account other environmental and social effects, are becoming increasingly common. We are realizing the 10-year dream of CDP’s Turkey operation.
We are launching an investment index that uses the climate change ratings given to companies by the CDP and will mediate the transfer of financial capital to companies that take climate change into account in Turkey. We believe that, thanks to this index, Turkey’s companies that are resistant to climate change, aiming to reduce their emissions in accordance with the objectives predicted by science and finally zero them, will enter the radar of international institutional investors and will be instrumental in bringing additional foreign capital to Turkey. We hope that this index will also attract the attention of local institutional investors and encourage companies that have not yet announced their climate change strategies. “