CDP, Markit and NASDAQ to Offer New Green Investment Indices

CDP, Markit and NASDAQ to Offer New Green Investment Indices

Investors who want to put their money behind companies that manage environmental impacts responsibly received news of two new options this week.

Carbon Disclosure Project
and Markit said Thursday they will launch a family of investment indices tracking the performance of companies with robust carbon management strategies. Meanwhile, a new index that tracks leaders in sustainability reporting was unveiled Monday by NASDAQ and CRD Analytics.
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The indices enter an increasingly crowded field of investment vehicles that track corporate environmental performance. FTSE, Dow Jones and HSBC offer green-focused indices, while Standard and Poor’s launched a U.S. Carbon Efficient Index earlier this year in addition others already in place. HSBC reported this week that companies in the Energy Efficiency and Energy Management sector have earned 16 percent returns this year, compared to the 6.7 percent return of the global equities market as a whole.

CDP is a U.K.-based nonprofit that has aggregated a wealth of corporate climate change data from the questionnaire it sends to global companies every year seeking information on their greenhouse gas management strategies. The highest scoring carbon-intensive and non-carbon-intensive companies make it to the Carbon Disclosure Leadership Index, which will serve as a basis for the new CDP-Markit indices launched this year.

Examples of companies that made it to the Index include BASF, Lafarge, Barclays and Tesco. CDP and Markit, a financial information services firm, will first launch a U.K. and European index before unveiling U.S. and global indices.

Meanwhile, a new index that tracks leaders in sustainability reporting was launched Monday by the NASDAQ and CRD Analytics.

NASDAQ OMX CRD Global Sustainability 50 Index will include companies that voluntarily and publicly report information for their areas such as carbon footprint, energy and water consumption, waste, and community investment.

The data disclosure must conform to the (GRI) G2/G3 guidelines, including at least 20 percent each of the core environment and social performance indicators, as well as 70 percent of the total financial performance indicators.