Morningstar, Inc. announced the Morningstar Low Carbon Risk Index Family, a new group of indexes that provides diversified exposure to equities across regions and emphasizes companies aligned with the transition to a low-carbon economy. Powered by Sustainalytics' Carbon Risk Ratings, the indexes are created through an optimization process that targets low portfolio-level carbon risk and fossil fuel exposure. A new white paper, "Preparing for a Low Carbon Economy: Investing in the Era of Climate Change," explains how the Morningstar Low Carbon Risk Index Family addresses the urgency around climate change by emphasizing companies aligned with the transition to a low-carbon economy. Not only do the indexes reflect lower climate-related risks, they also exhibit attractive investment attributes. The full white paper is available here for download. The new index family is Morningstar's next step in supporting environmental concerns of investors. In 2018, the company introduced the Morningstar Low Carbon Designation for funds and the Morningstar Portfolio Carbon Risk Score to establish a methodology for investors to evaluate their portfolios' carbon risk. In 2016, the company launched the Morningstar Sustainability Rating™ to help investors evaluate funds based on environmental, social, and governance (ESG) factors, and it continues to publish thought leadership and research about sustainable investing. The Morningstar Low Carbon Risk Indexes are derived from the large- and mid-cap segment of their equivalent broad market benchmark. For example, the constituents of the Morningstar Global Markets Low Carbon Risk Index come from the Morningstar Global Markets Large-Mid Cap Index, which targets 90% of global equity market capitalization across developed and emerging markets. To be eligible, a company must have undergone a carbon risk assessment by Sustainalytics, which provides carbon research on more than 4,000 companies across 130 industry groups. Indexes are constructed using the 12-month trailing averages of both the Morningstar Portfolio Carbon Risk Score and the Morningstar Portfolio Fossil Fuel Involvement, a weighted average of constituent-level exposure to fossil-fuel-intensive industries. The number of stocks in each index is variable and subject to eligibility requirements, the results of the optimization process, and weighting considerations.