Sat, 03/06/2010 - 19:06
http://etindex.com/etindex.sife.php
Environmental Investment Organization, a London-based firm, is pairing up with Standard & Poor's indices to create a comprehensive index of the world's largest companies, factoring in their carbon emissions.
The index should be launched within the next three months says its founder, City of London veteran Michael Gill, who this week launched the first stage in the project – a ranking of 1,000 of the world's largest companies, including from the US, Europe, and Asia based on their absolute greenhouse gas emissions.
The hope is that as institutional investors and pension funds invest in proportion to the ranking – as they do with most indexes – pressure on companies to improve their carbon emissions policy will mount. Indian companies fared poorly on the rankings: the highest, was Hindustan Unilever, at position 74, on the ET Global 1000 Carbon Ranking, followed by Larsen & Toubro Ltd, at 127, Infosys at 156, and Infrastructure Development Finance at 287.
According to Mr Gill, part of the reason is to do with disclosure – rankings are skewed in favor of companies that meet the most stringent global requirements for independent verification of their results – something that few global organizations manage.
However, the hope is that over time more and more companies will be persuaded towards greater disclosure. While discussions with investment groups are in their early stages, Mr Gill remains optimistic that the index will find its supporters.
Ahead of the next climate change summit in the German city of Bonn, several initiatives to persuade corporates to step up their efforts to reduce their carbon footprint have been launched.
At the start of February, ECPI – the Italian sustainability research firm — partnered with consultancy Arthur D Little to launch the Carbon Equity Index for sectors that traditionally release large amounts of emissions, while back in December, S&P Indices launched a carbon efficiency index for emerging markets.
~ BUSINESS LINE
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