FTSE JPX Net Zero Japan Index Series

The FTSE JPX Net Zero Japan Index Series is designed to reflect the performance of Japanese companies, based on the constituents in the FTSE JPX Japan 500 Reference Index and the FTSE JPX Japan 200 Reference Index*, where the weights of index constituents vary to account for risks and opportunities associated with the transition to a low carbon economy. The constituent weights are tilted with Fossil Fuel Reserves, Carbon Emissions, Green Revenues, TPI Management Quality and TPI Carbon Performance for potentially signalling the 2DC transition progress / performance of the companies.

In addition, the indexes are aligned with the EU’s Climate Transition Benchmark criteria (CTB), by targeting a minimum 30% reduction in carbon emissions relative to the reference benchmark and applying a decarbonization trajectory to achieve “net zero” by 2050 using FTSE Russell’s target exposure methodology.

The Index Series consists of:

  • • FTSE JPX Net Zero Japan 500 Index
  • • FTSE JPX Net Zero Japan 200 Index

The index series design incorporates five key climate data inputs from the TPI core assessments and FTSE Russell's climate framework:

  • Fossil fuel reserves: Underweight companies with fossil fuel reserves
  • Carbon emissions: Over/underweight companies according to their greenhouse gas emissions whilst applying sector neutrality
  • Green revenues: Overweight companies generating revenues from the global green economy
  • TPI Management Quality: Over/underweight companies based on the extent to which they are managing the risks and opportunities related to the low-carbon transition and how they are addressing key aspects of the Taskforce on Climate-related Financial Disclosures (TCFD)
  • TPI Carbon Performance: Over/underweight companies according to the extent to which they are committed to carbon emissions pathways that are aligned with 2DC/below 2DC warming scenarios

The indexes can be used as performance benchmarks, or as the basis for index-linked products including index tracking funds, derivatives, and Exchange Traded Funds (ETFs).

* The underlying FTSE JPX Japan 500 Reference Index consists of TOPIX 500 constituents with FTSE Russell free float weights and corporate actions applied and FTSE JPX Japan 200 Reference Index consists of the largest 200 stocks in terms of market value in FTSE JPX Japan 500 Reference Index.

The TOPIX 500 Index Value and the TOPIX 500 Marks are subject to the proprietary rights owned by JPX Market Innovation & Research, Inc. or affiliates of JPX Market Innovation & Research, Inc. (hereinafter collectively referred to as “JPX”) and JPX owns all rights and know-how relating to TOPIX 500 such as calculation, publication and use of the TOPIX 500 Index Value and relating to the TOPIX 500 Marks.

Index rules should be read in conjunction with supportingFTSE Russell noticesThese notices advise of advance changes in index methodology, which may not be reflected in index rules until the change effective date. The notices may also communicate revisions in index treatment in the period up to a rule change.