Key Features of the
Active Net Zero Index

Enablers not compliers

Complying with net zero targets is an honourable aim. However, enabling net zero solutions is where investment can deliver real change. Our index identifies enablers rather than compliers. Many companies are complying or moving towards compliance with clean emission targets. This is certainly positive, but we think investors are looking for more. We are targeting the enablers who are delivering clean energy solutions for everyone, not just themselves.

Penalising fossil fuel

The IEA has said that as of this year there is no need for new fossil fuel investments if we are to reach net zero. As a result, our index penalises fossil fuel activities. But companies with fossil fuel exposure are not excluded per se because many of them have essential skills to deliver key elements of the energy transition. Our index only includes them when active net zero activities dominate. Again, we are avoiding promises and focusing on actual performance. There may be more joy in heaven over a sinner who repents, but they do have to do more than just promise to repent.

Externally aligned

Eligibility criteria for inclusion in our Active Net Zero Clean Energy Index is externally defined using the EU Taxonomy for sustainably investment and selecting activities which are on the pathways set out by the IPCC in its Special Report on Global Warming of 1.5°C and more recently in the IEA’s Roadmap to Net Zero report.

Performance Not Promises

Our index includes companies based on their current contribution to the energy transition, not just their promised contribution. Many companies have well-meaning statements of strategy about how they will comply with net zero targets; we look at actual company delivery.

Methodology

Longspur Radnor Indices Limited defines an Active Net Zero company as one which is actively helping others in the transition to a net zero world, not simply achieving net zero themselves throughout their operations. This distinction is encapsulated throughout the index methodology in the distinction between ‘Active’ net zero activities, ‘Passive’ net zero activities and Negative net zero activities.

The Active Net Zero Clean Energy Index methodology is based on company revenues. For a company to be eligible they must have an Active Net Zero Score of at least 50%. The methodology is aligned with the EU Taxonomy, the IPCC 1.5oC Report pathways, and the IEA Roadmap.

Negative net zero activities are those based on fossil fuels including coal, oil and natural gas. Whilst companies that produce fossil fuels can be included, revenues from this sector counts against its active revenues making it difficult for those with significant fossil fuel activities to be included.

Energy specialists with knowledge at your fingertips