More indexes to address sustainable investment


Three index providers this week announced new products focused on companies that address environmental issues or show class-leading efforts on sustainability reporting.

FTSE Group has expanded its Environmental Opportunities (EO) index series with five regional indexes, covering the US, Japan, Europe, Asia-Pacific and Asia-Pacific ex-Japan, and two others covering the UK – one including stocks listed on the London Stock Exchange’s main market and the other focusing on its small-cap Alternative Investment Market.

The FTSE EO series was launched in June 2008 and in November nine new indexes were added covering the water, renewable energy, energy efficiency, and waste and pollution control sectors. Today’s launch means there are now 18 indexes in the EO family, which is based on research by Impax Group, a London-based environmental investment management company.

Nasdaq OMX Group has teamed up with CRD Analytics, a New York-based sustainability investment analysis firm, to launch the Global Sustainability 50 Index, designed to track the performance of companies that are leading on sustainability performance reporting.

Companies within the index must produce a corporate responsibility report which discloses sustainability data according to the Global Reporting Initiative’s G2/G3 guidelines – and report at least 20% of total core environmental performance indicators, at least 20% of social indicators and 70% of financial indicators.

CRD Analytics president Michael Muyot said: “The companies are ranked based on a more holistic set of risk-adjusted performance metrics. Using a quant-based, triple bottom line methodology allows companies to be compared on an apples-to-apples basis. This has helped elevate extra-financial analysis into mainstream investing.”

Meanwhile, London-based financial information services company Markit is to launch a family of investment indexes based on data from the Carbon Disclosure Leadership Index (CDLI).

The CDLI ranks responses to the Carbon Disclosure Project, an annual questionnaire sent to companies asking for disclosure of “investment-relevant” climate change information, such as greenhouse gas emissions data and their policies on climate risks and opportunities.

Markit plans to launch a global index and three regional indexes covering the UK, US, Europe.

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