Markit, a financial information services company, and the Carbon Disclosure Project (CDP), the leading independent global climate change reporting platform, today announced their intention to launch a family of investment indices reflecting the financial performance of companies with strong carbon management strategies.
By combining CDP’s benchmark climate change data and Markit’s index expertise, the two companies aim to create a family of high quality equity indices that will help investors gain exposure to companies that actively manage their impact on the environment.
The stock selection and weighting will be based on CDP’s annual corporate Carbon Disclosure Leadership Index (CDLI) data. CDP gathers data from companies globally through an annual information request on behalf of 475 institutional investors. The individual corporate reports are scored by professional services firm PricewaterhouseCoopers LLP based on the quality of information disclosed. This provides a deep insight into companies’ greenhouse gas emissions and climate change management strategies.
Markit and CDP plan to launch an index for the UK and Europe, in addition to a US index and a global index. Markit intends to license the indices to exchange-traded fund (ETF) and structured product providers.
Niall Cameron, Executive Vice President of Commodities, Indices, Equities and Risk Management at Markit, said: “The creation of this family of climate change indices underscores Markit’s commitment to the environmental markets.
“The quality, transparency and independence of the data underpinning these indices are of vital importance to their success and that is why we have chosen to work with CDP, a leading provider of emissions data, on this project.”
Paul Dickinson, CEO of CDP, said: “Climate change is a material issue for increasing numbers of companies and there are significant commercial opportunities for those with a strong carbon management strategy to benefit from the transition to a low carbon economy. This is why we are working with Markit to produce investment indices based on the Carbon Disclosure Leadership Index.”
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