24 Jun 2010 05:06:20
FTSE Group launches 'carbon risk' indices
FTSE group has announced the creation of two new indices based on the possible impact of climate change on investments.
The index provider has partnered with the Carbon Disclosure Project, which represents 500 institutional investors, and ENDs carbon, which provides ratings, to create the FTSE CDP Carbon Strategy All-Share Index and the FTSE CDP Carbon Strategy 350 Index.
Shares will be weighted based on the same criteria as the FTSE All-Share and FTSE 350 indices, but additional consideration will be given to the impact that the increasing cost of carbon emissions could have on returns.
The indices will be based on the predicted future emissions activities of the companies, rather than existing data, and will provide the ratings based on comparisons with operations in the same sector.
David Harris, director of responsible investment at the FTSE Group, said: "This is a timely and innovative index series which comes amidst a broad range of regulatory and market incentives being introduced around the world to facilitate the transition to a low carbon economy."
F&C's latest Question of the Month survey found that almost three-quarters of investors would consider using an ethical investment trust; however more than half of these said that this would depend on the investment focus of the operation.