Index Guidelines, see here
To be eligible for potential OCEAN Index inclusion, each financial instrument must have:
- a primary listing in one of the countries that are part of the Developed Markets as defined by the Solactive Country Classification, plus South Korea, Taiwan or Chile;
- a Total Market Capitalization of at least USD 150 million;
- a minimum average daily trading value – of USD 500k over prior 30 days. (Effective 12/2021)
Based on Index Universe, the initial composition of the Index as well as any selection for an ordinary rebalance is determined on the Selection Day in accordance with the following rules:
For a company to be reviewed for consideration in the Index, it must first pass an initial screen by achieving an internal score of 3 or better out of 5 for climate impacts, clean solutions, and sustainability.
Scores are qualitative, emphasizing impacts for climate stability, preserving biodiversity, preventing pollution, or lowering greenhouse gases. Sustainability & environment are emphasized. Recommendations of an Index Advisory Committee made up of experts in marine sciences and related fields will be taken into account. There’s strong bias in favor of purer-play companies focused on products, goods, services such as for:
- climate stability and decarbonization;
- healthy oceans, global ecosystems, biodiversity;
- renewable energy;
- sustainability, and eco-thinking;
- clean water, air, land;
- greener transport;
- better efficiency;
- pollution prevention, or greener alternatives more widely such as agricultural, or non-meat substitutes;
- climate change solutions broadly, advancing once-cooler climate.
Sectors include:
- Clean Energy (CE),
- Greener Transport (GT),
- Pollution Prevention (PP).
- Sustainable Foods (SF),
- Water (WT).
5 discrete OCEAN Index Sectors are: Sustainable Fisheries (SF); Clean Energy (CE); Greener Shipping (GS); Water Treatment (WT); and Pollution Prevention (PP).
Companies in emerging related fields ahead may be considered too with respect to their advancing or reflecting this theme. There is a clear focus on companies providing sustainable solutions with a particular focus on reducing climate crisis, and advancing clean solutions more broadly. These include for example low-carbon renewable energy and reducing greenhouse gases, preventing pollution in the first place, better sustainability, healthier biodiversity, and cleaner oceans, air, and land.
External ESG scores of B- (or equivalent) or better are generally required for at least 90% of companies included in OCEAN, which do have an ESG score. Scores for ESG filtering are from recognized ESG data providers, or Certification sources.
Owing to the fact attention to climate is in early stages, with clean solutions more broadly and sustainability an emerging theme, smaller-cap and mid-sized companies may have a leading role in Index composition. High volatility is expected here. So too is attention to environment among Environmental, Social, and Governance (ESG) considerations, and concern for climate solutions, and impact investing.
On each Selection Day, each Index Component is assigned equal weight.