P&G, Wal-Mart and Chevron Join New 'Carbon Efficient Index'

P&G, Wal-Mart and Chevron Join New 'Carbon Efficient Index'

Procter & Gamble, Johnson & Johnson, Wal-Mart and Chevron made the list of companies in Standard and Poor's new U.S. Carbon Efficient Index.

The new index, a subset of the S&P 500, is made up of 362 large-cap companies that have lower carbon footprints when compared to the overall S&P 500. Through 2008, the Carbon Efficient Index had an average annual carbon footprint that was 48 percent lower than the S&P 500.

The footprint figure is based on the amount of annual greenhouse gas emissions divided by a company's total revenue.

The IT sector was the most heavily weighted, followed by health care and energy. The top 10 companies on the U.S. Carbon Efficient Index by weight include: Procter & Gamble, Chevron Corp., Johnson & Johnson, AT&T, IBM, Microsoft, Wal-Mart, McDonald's, Cisco and General Electric.

To make up the list, S&P used individual carbon footprint data from Trucost Plc., an environmental research firm whose work has been used by others to assess investment risk and performance of major U.S. companies. The Interfaith Center on Corporate Responsibility, for example, used Trucost data to offer investors "climate risk profiles" of more than 150 companies.

S&P will update the index every quarter. The 100 companies with the largest carbon footprints are removed if their aggregate exclusion doesn't reduce an individual's sector weight by more than 50 percent. Companies that haven't received a carbon footprint are also left off the list.

The U.S. Carbon Efficient Index is one of a series of environmentally-focused indices, including future benchmarks for companies in Europe and emerging markets. Other existing environmental indices offered by S&P include: Global Alternative Energy, Global Clean Energy, Global Water and Global Natural Resources.