Originally published on Sustainnovate.
By Henry Lindon
The Shanghai Stock Exchange has launched what is, essentially, China’s first “carbon efficient” financial index, according to recent reports.
The new index — the Shanghai Stock Exchange (SSE) 180 Carbon Efficient Index — was launched jointly by the SSE and China Securities Index, and will reportedly only be comprised of “low-carbon” companies that outperform (or match) their market.
Altogether, simulations done by analysts suggest that the new index possesses a “carbon intensity” roughly 85% lower than the benchmark SSE 180 Index — while still providing high returns.
The new index was put together with support from the environmental consultancy Trucost — the firm that quantified the carbon intensity of the companies on the SSE benchmark via the analysis of various factors, including supply chains.
The vice general manager of China Securities Index, Liu Zhong, commented: “In today’s China where green growth is the new norm, green indexes such as the SSE 180 carbon efficient index will provide the market with a great tool for green financial innovation, guiding more capital and more resources towards low carbon and green companies and industries, which will in turn accelerate the green growth economy.”