BSE launches green equity index for companies

The Bombay Stock Exchange (BSE) has launched a new sectoral index — BSE-GREENEX — to measure the performance of companies in terms of carbon emissions and promote green investments.

The index includes top 20 companies based on green house gas numbers, free float market capitalisation and turnover.

"It is based upon purely quantitative and objective performance signals to assess carbon performance," BSE said in a statement, reports IANS.

"In keeping with BSE's efforts to create fund friendly indices, it is the third index which is calculated based on the capping methodology. This index will be helpful to asset managers for creation of various products, to help investors to invest in the green theme of India," it added.

The index is expected to have a feedback effect on companies' reputation.

It will help the government to gauge policy implementation and acceptance with regard to energy usage and efficiency measures, as the market follows an efficient signalling mechanism which adjusts positively or negatively to any news or policy shifts.

This index has been developed by BSE in association with ‘gTrade’ so as to promote green investing, with emphasis on financial performance and long-term viability of companies.