Sustainable Investment space in India

In India, S&P BSE Indices has two investible indices in the sustainable investment space—namely, the S&P BSE CARBONEX and S&P BSE GREENEX.

The S&P BSE CARBONEX seeks to track the performance of the companies in the S&P BSE 100, based on their commitment to mitigating risks arising from climate change in the long run. Index constituent weights are modified in accordance with the companies’ relative carbon performance, as measured by the level of their greenhouse gas emissions and carbon policies. S&P Dow Jones Indices has partnered with RobecoSAM, a global specialist in sustainability investing, to provide the carbon performance scores for Indian companies.

The S&P BSE CARBONEX was launched on Nov. 30, 2012.  Exhibit 1 depicts the historical performance of the index from the base date—Sept. 30, 2010, when the base value was 1,000.

Exhibit 1: S&P BSE CARBONEX Performance 

The S&P BSE GREENEX consists of the top 25 stocks in the S&P BSE 100 that adopt relatively better energy-efficient practices.  Greenhouse gas emission numbers are provided by Trucost Plc, which is a global specialist in providing environmental data.  S&P Dow Jones Indices recently acquired a controlling stake in Trucost Plc.

The S&P BSE GREENEX was launched on Feb. 22, 2012.  Exhibit 2 depicts the historical performance of the index from the base date—Oct. 1, 2008, when the base value was 1,000.

Exhibit 2: S&P BSE GREENEX Performance 

Green investment in India may be in a nascent stage, but it is evolving and expected to gain momentum in the coming years.  Many stakeholders, including the government, corporations, and market participants, have become environmentally conscious and are looking to integrate environmental aspects of businesses in their mainstream investment strategies.  Green investment will not only encourage companies to have environmentally friendly policies, but also help ensure that they remain relevant in the long run to potentially create value for all stakeholders.

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