The Hindu Business Line : S&P ESG India Index launched

Standard & Poor’s, Crisil and KLD Research & Analytics, the social and environmental research firm, have announced the launch of the S&P ESG India Index — the first investable index of companies whose business strategies and performance demonstrate a high level of commitment to meeting environmental, social and governance [ESG] standards.

The index provides investors with an instrument to incorporate sustainability measures into their investment decisions and will provide a model for the launch of similar indices in other emerging markets.

ESG Criteria

Initiated and sponsored by the International Finance Corporation (IFC), a member of the World Bank group, this Index comprises 50 Indian companies that meet certain ESG criteria and have been drawn from the largest 500 companies listed on the National Stock Exchange of India through a two-stage screening process.

Dr Subir Gokarn, Chief Economist, Standard & Poor’s Asia Pacific, said: “As the private sector becomes more important in the growth and development of emerging economies, the profit motive needs to be brought into alignment with public interest. The scope of regulation, though critical, is limited without a commitment by investors to reward strategic behaviour that creates long-term value by balancing the interests of all stakeholders.”

Performance

“The S&P ESG India Index is unique because it links a company’s ESG score to its index weightings so that companies with higher scores carry higher weightings. While the 50 companies that have been included in the index are largely familiar names, their performance on ESG parameters assures investors that their portfolio is consciously balancing the interests of all stakeholders and, thereby, creating a platform for strong long-term performance,” said Ms Alka Banerjee, Vice-President of Index Services, Standard & Poor’s.

The S&P ESG India Index will be maintained by India Index Services Ltd, a joint venture between Crisil and the National Stock Exchange of India, which also manages the flagship S&P CNX NIFTY index of India’s largest and most liquid companies.

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