FTSE Russell and Planetrics Sign MoU to Develop Climate-Scenario Indices Across Asset Classes

FTSE Russell and Planetrics have signed a Memorandum of Understanding to jointly develop climate-scenario based indices and analytics, marking a significant step in integrating granular climate risk modelling into mainstream investment benchmarks. Under the proposed collaboration, Planetrics will make its proprietary physical and transition climate risk analytics, models and scenario tools available to FTSE Russell to support the development of new indices across multiple asset classes. The two organisations anticipate launching the new indices later this year, with FTSE Russell responsible for governance and commercial distribution while Planetrics provides research expertise and technical depth.

 

The Strategic Rationale for the Partnership

 

Climate-scenario based indices are emerging as an important tool for institutional investors seeking to integrate climate risk into portfolio construction, asset allocation and benchmarking decisions. Traditional ESG indices have largely focused on backward-looking metrics, but forward-looking scenario analysis offers a more rigorous foundation for understanding how climate transition and physical risks may reshape asset valuations over time. By combining FTSE Russell's index governance capabilities with Planetrics' scenario modelling expertise, the partnership aims to address a gap in the current benchmark landscape.

Stephanie Maier, Head of Sustainable at FTSE Russell, said the partnership reflects the firm's ongoing commitment to developing transparent indices that draw on robust research to help clients better invest for and through the low-carbon transition. The framing positions the collaboration as innovation aimed at meeting evolving investor needs rather than as a standalone product development exercise. As more asset owners adopt climate-aligned investment strategies, demand for benchmarks that authentically reflect climate scenario outcomes is expected to rise.

 

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Planetrics' Technical Contribution

 

Planetrics, part of environmental consulting firm SLR, specialises in climate-risk analytics, modelling and scenario-based analysis with the capability to model how physical shocks and uneven transition pathways unfold across regions and sectors. Thomas Bremner Bligaard, Executive Director at Planetrics, said the collaboration reflects where the market needs to go, from acknowledging climate risk to actually pricing it. He emphasised that Planetrics modelling traces how costs, supply chains and competitive positions evolve at a company level under different climate scenarios.

The granularity of this analysis translates into portfolio signals precise enough to support better allocation decisions and stronger risk management. Company-level scenario analysis represents a meaningful advance over sector or country-level approaches that have historically dominated climate risk integration in indices. By incorporating finer-grained scenario data, the new indices should help investors distinguish between companies based on their actual exposure and resilience rather than relying on broad sectoral assumptions.

 

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Outlook for Climate-Scenario Investing

 

The FTSE Russell and Planetrics partnership reinforces a broader trend in which leading index providers are deepening their integration of climate analytics to meet rising institutional demand. As regulatory frameworks tighten and investor expectations evolve, climate-aware benchmarks are likely to become an increasingly important segment of the global index market. The success of these new indices will be measured both by adoption among institutional investors and by their ability to deliver meaningful differentiation in portfolio outcomes.

Whether the partnership can deliver on its full potential will depend on the credibility of the underlying scenario modelling, the quality of the resulting indices and the broader adoption of climate-aligned investment strategies. Sustained execution would reinforce FTSE Russell's positioning as one of the leading providers of sophisticated climate-related benchmarks. The launch of the new indices later this year will provide an early test of how effectively granular scenario analytics can be embedded into mainstream index products.