The index, Morningstar Low Carbon Transition Leaders (LCTL) Indexes, utilises Morningstar Sustainalytics Low Carbon Transition Ratings, which assesses a company’s alignment with a net zero pathway, based on an evaluation of its strategy and actions as well as scenario analysis. The constituent selection includes the identification of “climate transition leaders” by grouping companies from the parent index by sector, and then ranking them according to their composite Low Carbon Transition Leaders Score, with the index capturing the top scoring 50% of each sector by market cap. The series will launch 9 indices – a global index, three developed markets and one emerging markets index, two regional indexes and two single country indexes.

Source: ESG Today