The Bombay Stock Exchange will launch a new index, BSE Greenex, on Wednesday. The index will track companies which are friendly to the environment based on a methodology provided by IIM-Ahmedabad.
The index will also track companies that have minimum carbon footprint. BSE will also launch a guideline for investors which will help them understand the relationship between the amount of carbon footprints of each company and the respective short-term and long-term impact on its investment and returns.
The index and the guidelines will be launched by minister of corporate affairs. At present, BSE has 13 sectoral indices tracking key sectors including banking, real estate, Metal, power and so on. In addition, it has market capitalisation based indices, such as BSE Mid cap, BSE Small cap, BSE 100, BSE 200 and BSE 500.
This is the second theme based index launched by BSE after the Shariah index.
The National Stock Exchange had launched an index tracking environment-friendly companies a couple of years ago. The S&P ESG India index provides investors with exposure to a liquid and tradable index of 50 of the best performing stocks in the Indian market as measured by environmental, social, and governance parameters. It is an index based purely on quantitative factors rather than subjective ones.
This index not only ensures a selection of environmentally, socially and corporate governance responsible companies, but also securities which are representative of the Indian equity markets based on size and liquidity.
