In response to growing demand from investors for environmentally focused indices, Standard & Poor’s has launched the S&P U.S. Carbon Efficient Index that will measure the performance of large cap U.S. companies with relatively low carbon emissions, while closely tracking the return of the S&P 500.
S&P says organizations are paying more attention to the impact of greenhouse gases on the climate and increasingly more investors consider carbon efficiency as an important investment theme.
This new index is part of the S&P’s global thematic index series, which covers green themes including water, forestry, ecology and carbon efficiency. The index is comprised of S&P 500 companies that have a relatively low carbon footprint. Trucost Plc, an environmental data organization, calculates the carbon footprint based on the company’s annual greenhouse gas emissions assessment (expressed as tons of carbon dioxide equivalent) divided by annual revenue.
Through 2008, the average annual carbon footprint of the S&P U.S. Carbon Efficient Index was 48% lower than that of the S&P 500 as a whole, says Standard & Poor.
S&P joins the ranks of Merrill Lynch Global Research, which introduced a new global emissions benchmark last year. The MLCX Global CO2 Emissions Index is designed to provide investors with insight into the global CO2 emissions market. It is based on contracts established under the European Union Emission Trading Scheme and the Kyoto protocol. The MLCX Global CO2 index (MLCXCO2E) gives investors exposure to both schemes, weighting them by their relevance in the global emissions market.
In addition, the European Union Allowance (EUA) and Certified Emissions Reduction (CER) markets can also be accessed individually through the MLCX EUA Index (MLCXEUAE) and the MLCX CER Index (MLCXCERE), respectively.
More than half of the S&P 100 released sustainability reports in 2007.