Index provider FTSE Group is considering creating global, U.S.-based and European country-based carbon strategy share indexes after launching four new indexes last month to help investors manage risks linked to climate change, a senior FTSE official said.
In February, FTSE with its partners expanded the FTSE CDP Carbon Strategy Index Series with a Europe-wide, a Japan-based and two Australia-based indexes for investors such as pension funds, which want to include carbon risks in their long-term strategy.
We are looking to create a global index and a U.S. index too, David Harris, FTSE Group's director of responsible investment, told reporters at a presentation.
Asked if FTSE was planning to create country-based indexes for Europe, Harris said: We will do it if there is demand. We've got a lot of data, and it would be easy for us to do that.
FTSE CDP carbon strategy indexes are based on stocks in corresponding equity benchmarks, such as the FTSE Developed Europe Index. Each index member is evaluated based on its exposure to carbon regulations and other risks that could hit its performance as the world steps up efforts to fight climate change.
The companies within the index are then re-weighted based on the level of carbon risk, helping investors to tilt their funds towards more carbon-efficient companies, Harris said.
For example, in the new Europe wide index, the weight of Italy's biggest power utility, Enel
(Reporting by Svetlana Kovalyova, editing by Jane Baird)