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Category: Investment
BNDES and BM&FBOVESPA announce development of stock index focusing on climate change
Carbon Efficient Index will be based oHi Dawn,n IBrX-50 companies, weighted by their greenhouse gas emissions
December 15, 2009 - The Brazilian Development Bank (BNDES) and BM&FBOVESPA announced today at the 15th United Nations Climate Change Conference (COP-15), in Copenhagen, the development of the Carbon Efficient Index to encourage publicly-listed companies to reduce greenhouse gas emissions. The index will be an economic instrument for companies to adopt environmental management practices focused on climate change. It will be weighted by the company carbon footprint, which reflects the amount of emissions from all sources of activities associated with each company.
The Carbon Efficient Index is expected to be launched in 2010 and is based on Brazil Index 50 (IBrX-50), an index comprising the 50 most traded stocks on BM&FBOVESPA, weighted in the portfolio by free float (the amount of company shares that are available to be traded in the market). The weight of each company in the index will be based on its participation in IBrX-50, as well as its efficiency in greenhouse gas emissions. The lower the ratio between the emissions of these gases and the company’s revenue the higher its efficiency.
Therefore, companies with higher efficiency in greenhouse gas emissions in relation to other companies within the same sector will tend to be overweighted in the new index, when compared with their position in IBrX-50. On the other hand, those companies that are not so efficient will tend to be underweighted.
It is expected that the new Brazilian Carbon Efficient Index will bring several positive impacts, such as: incentives for the most liquid companies to measure and manage their carbon emissions, more transparency in the market regarding company emissions and new opportunities for investors sympathetic to environmental issues. In the same vein, the BNDES and BM&FBOVESPA believe that this initiative will contribute to the dissemination of an environmentally sustainable corporate culture and will help to prepare Brazilian companies for the future in a low-carbon economy.
Brazil's Secretariat of Social Communication (SECOM)
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