By Greentech Lead Team: Bombay Stock Exchange will launch
a new index called BSE GREENEX, measuring the performance of companies in terms
of carbon emissions.
The index model developed by BSE in collaboration with the premier B-school
Indian Institute of Management, Ahmedabad (IIM-A) will enable investors take
more informed investment decisions about companies in the energy intensive
sectors, amongst others.
A model has been created in collaboration with BSE, where BSE-100 companies
were evaluated on the basis of green house emissions in the last four financial
years from 2007-08 till 2010-11.
The companies were tested in different combinations of
carbon emission intensity, market capitalization, and turnover. The index will
have fair representation of firms from virtually all the sectors.
The top ranking companies from each sector like power, steel, cement have made
it to the new index called BSE-GREENEX currently comprising less than 30
companies. During the dry runs, the BSE-GREENEX has performed better than the
As part of this joint venture project, IIM-A evaluated the firms on carbon side
based on the information put by them in public domain (annual reports), while
BSE’s main role was to detail on financial side of these companies and provide
technical backup for it, according to a PTI report.
Like the best performing stocks of companies make it to the Sensex-30 and the
existing ones have to exit for non-performance, BSE-GREENEX will too witness
firms coming and going, said project coordinator at IIM-A Amit Garg.
The concept is all about screening companies doing good
on carbon side, as the concern for climate change is growing among the