- New Environmental Markets index sector identifies food, agriculture and forestry industries as playing major role in providing solutions to global environmental challenges
- Inclusion reflects changing market for environmental investment
- 31 selected food, agriculture and forestry companies to be included for the first time in the FTSE Environmental Market Series
FTSE, a leading global index provider, has announced that it is introducing a new sector to its Environmental Markets indices, to be called ‘Food, Agriculture and Forestry’. It brings the total number of sectors to seven and subsectors to 29. At the Environmental Markets Semi-Annual Review there were 41 additions to the headline index, 31 of which were from the new sector; this will lead to 480 companies being included in the FTSE Environmental Opportunities All-Share Index as a result of the review.
The new sector will include three subsectors - Sustainable and Efficient Agriculture; Logistics, Food Safety and Packaging; and Sustainable Forestry and Plantations. The decision to introduce this new sector was taken after consultation with market participants and follows the June 2013 semi-annual review meeting of the FTSE Environmental Markets Advisory Committee. The June 2013 meeting was also the first under the Chairmanship of Jack Ehnes, Chief Executive of CalSTRS. The new sector and subsectors will be included as of the index rebalance on Monday 24 June.
David Harris, Director in the ESG Group at FTSE, said: “The world is changing rapidly and investors need tools to understand these changes. The global population is predicted to reach nine billion by 2050 and combined with growing per capita consumption there is a vital need for companies within the food, forestry and agriculture markets to deliver improved efficiency and less wasteful production. The inclusion of an additional new sector reflects the changes in the market for environmental investment as part of FTSE’s on-going programme of index evolution and development.”
The new sector includes companies which deliver important environmental solutions, including carbon sequestration, biodiversity protection, improved farming and efficient resource use.
FTSE defines Environmental Markets companies as providing products and services that offer solutions to environmental challenges or that improve the efficiency of natural resource use. The FTSE Environmental Markets indices are constructed using the FTSE Environmental Markets Classification System, which includes seven sectors and twenty-nine subsectors. The seven sectors are: Renewable and Alternative Energy; Energy Efficiency; Water Technology; Waste and Pollution Control; Environmental Support Services; and Food, Agriculture and Forestry. The FTSE Environmental Markets family includes the Environmental Technology and Environmental Opportunities index series.