The Environmental Investment Organisation (EIO) a non-profit organization has announced that it is to launch a carbon ranking of the globes largest companies aimed at helping fund managers build in carbon emissions into their investment decisions, JSM Financial sources have revealed.
If sufficient backing is received from fund managers it is likely that the Environmental Tracking (ET) Carbon Ranking Index may be signed up as a live investment index by Standard & Poors.
Indexes such as the Dow Jones, and the FTSE 100 rank companies so that fund managers are able to invest according to the companies’ position on the index.
The new index will similarly rank firms by their market capitalization, but will now also add a grade according to the companies’ emission reduction performance, JSM Financial was told.
The new index aims to encourage fund managers to invest in proportion to the firms efforts at reducing their carbon footprint as well as their market capitalization, EIO announced. It is hoped that a company reflecting greater efforts toward emission reductions will appear higher ranked on the index and thereby increase demand for its shares, and so push up share price, thereby rewarding the company for its efforts.
Indexes using publicly available emissions data from companies’ own reports and the Carbon Disclosure Project have so far been built for the Global 800 and the European, North American, Asia-Pacific and BRIC ( Brazil, Russia, India and China) regions, JSM Financial has learned.
