CHAPTER II U.K. MINIMUM STANDARDS FOR THE DESIGN OF THE BENCHMARK METHODOLOGY

SECTION 3 U.K. MINIMUM STANDARDS FOR [F1 UK PARIS-ALIGNED BENCHMARKS]

Article 11 U.K. Baseline reduction of GHG intensity or absolute GHG emissions for [F1 UK Paris-aligned Benchmarks]

The GHG intensity or, where applicable, absolute GHG emissions for [F1 UK Paris-aligned Benchmarks], including Scope 1, 2 and 3 GHG emissions, shall be at least 50 % lower than the GHG intensity or absolute GHG emissions of the investable universe.

For the purposes of the first subparagraph, Scope 3 GHG emissions shall be construed in accordance with the phase-in implementation period set out in Article 5.

Article 12 U.K. Exclusions for [F1 UK Paris-aligned Benchmarks]

1. Administrators of [F1 UK Paris-aligned Benchmarks] shall exclude all of the following companies from those benchmarks:

(a) companies involved in any activities related to controversial weapons;

(b) companies involved in the cultivation and production of tobacco;

(c) companies that benchmark administrators find in violation of the United Nations Global Compact (UNGC) principles or the Organisation for Economic Cooperation and Development (OECD) Guidelines for Multinational Enterprises;

(d) companies that derive 1 % or more of their revenues from exploration, mining, extraction, distribution or refining of hard coal and lignite;

(e) companies that derive 10 % or more of their revenues from the exploration, extraction, distribution or refining of oil fuels;

(f) companies that derive 50 % or more of their revenues from the exploration, extraction, manufacturing or distribution of gaseous fuels;

(g) companies that derive 50 % or more of their revenues from electricity generation with a GHG intensity of more than 100 g CO₂ e/kWh.

For the purposes of point (a), controversial weapons shall mean controversial weapons as referred to in international treaties and conventions, United Nations principles and, where applicable, [F2 UK legislation].

2. Administrators of [F1 UK Paris-aligned Benchmarks] shall exclude from those benchmarks any companies that are found or estimated by them or by external data providers to significantly harm one or more of the environmental objectives referred to in Article 9 of Regulation (EU) 2020/852 of the European Parliament and of the Council(1), in accordance with the rules on estimations laid down in Article 13(2) of this Regulation.

3. Administrators of [F1 UK Paris-aligned Benchmarks] shall disclose in their benchmark methodology any additional exclusion criteria they use and which are based on climate-related or other environmental, social and governance (ESG) factors.

Textual Amendments

F2 Words in Art. 12(1) substituted (18.10.2021) by The Markets in Financial Instruments, Benchmarks and Financial Promotions (Amendment) (EU Exit) Regulations 2021 (S.I. 2021/1074), regs. 1(2), 6(6)(b)

Textual Amendments

F1 Words in Ch. 2 s. 3 substituted (18.10.2021) by The Markets in Financial Instruments, Benchmarks and Financial Promotions (Amendment) (EU Exit) Regulations 2021 (S.I. 2021/1074), regs. 1(2), 6(6)(a)

(1)

Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (OJ L 198, 22.6.2020, p. 13).