China's Stock Market to Launch Carbon Efficiency Index Next Month
Beijing. China's equity market in Shanghai will launch a carbon index next month, the first of its kind in China with the aim of identifying the greenest companies on the exchange.
The Shanghai Stock Exchange (SSE) and China Securities Index (CSI) will launch the index on Oct. 8, according to a statement from the CSI published on its website on Wednesday. It will track the carbon efficiency of blue-chip companies belonging to Shanghai's SSE180 index, which are worth 15 trillion yuan ($2.35 trillion) in total.
"The less carbon intensive companies will be weighed more in the index. It aims to direct the flow of capital from funds managers towards green businesses," said Zhao Yonggang, an official with CSI responsible for compiling the index.
The index will rank all the constituent stocks of the SSE180 apart from the most carbon-intensive, defined as those with a carbon footprint that exceeds 1,000 tonnes of CO2 per million US dollars of market value.
The sampled companies still include giant energy firms like PetroChina, the biggest listed steel firm Baoshan Iron and Steel and the China Railway Group .
China is planning to launch a national carbon market no later than early 2017 in order to bring down greenhouse gases starting by around 2030, but it is not yet mandatory for listed companies to disclose their annual emissions rate.
The index will adopt carbon benchmarks provided by Trucost, a British environmental consultancy, to assess the emissions of the firms.
"Some institutes have shown interest in developing products linked to the index," said Zhao. "The index will move along with the market value of the 180 stocks on a daily basis, and we will adjust carbon-related factors every half-year," said Zhao.
Turmoil on China's stock markets has wiped out 40 percent of the value since June, but CSI said the carbon index is already 64.77 percent higher than the benchmark level of 1000 which reflects prices on July 2013.
Reuters
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