FTSE launches broad environmental index as eco benchmarks boom

GES and World Resources Institute invite investors to build ecosystem index.

FTSE, the global index company, has launched the FTSE Environmental Opportunities All-Share Index, made up of over 450 companies in the alternative energy, water and waste management sectors, amidst a flurry of activity in the formulation of sustainable indices. The FTSE index includes companies from its Global Equity Index Series that have a minimum of 20% of revenues sourced from environmental markets or technologies. The company research is being carried out by Impax, the specialist environmental fund manager, which has partnered with FTSE to develop a range of environmental technology indices. The two already work together on the FTSE ET50 index of pure-play clean tech companies. The top ten constituents of the new index are, in order: Siemens, Suez, Iberdrola, ABB, United Technologies, 3M, Enel, Emerson Electric, Honeywell International and Philips. Will Oulton, head of responsible investment at FTSE said, “The index will appeal to institutional and retail investors who want to gain exposure to and track the performance of those companies who are transforming their businesses to increasingly source revenues from global environmental markets.” Russell Investments has already licensed the index for an environmental technology multi-manager fund.Seperately, GES Investment Services, the Stockholm-based SRI research company has allied with the World Resources Institute (WRI), to invite investors to develop an Ecosystem Change Pilot Index. The project was launched at a session on ecosystem change at the annual UN Principles for Responsible Investment (PRI) conference this week in Seoul. Its aim is to consider which companies fail to make the connection between their bottom line and the health of ecosystems and which are best positioned to succeed as ecosystem services grow scarcer and new markets emerge. Cecilia Procopé Repinski, key account manager at GES, said: “An Ecosystem Change Index can be a resource that helps investors to identify potential risks to corporate performance due to operational disruptions, higher costs of input, new government regulations, changing consumer preferences, and reputation risks.” Procopé Repinski previously worked at the WRI in Washington DC, developing The Millennium Ecosystem Assessment, supported by the UN, which is the largest assessment of the state of the world’s ecosystems. In another sustainable index-related development, the International Securities Exchange (ISE) has entered into

an agreement with First Trust Advisors, the US financial services company to create and list an exchange-traded fund (ETF) based on the ISE Global Wind Energy Index, which includes global listings of companies that are active in the wind energy industry.Cronus Capital Markets, the Canadian financial services company has also launched the CCM BetterworldStock Index. The index represents all companies in Canada focused in the areas of green energy, environmental technology and related industries.