Toronto-based TMX Group Ltd. and S&P Dow Jones Indices LLC, whose Canadian office is also in Toronto, announced on Thursday that they are introducing three new climate change-related indices to Canada derived from constituents in the S&P/TSX 60 index.
“The new indices recognize Toronto Stock Exchange issuers included in the S&P/TSX 60 for their efforts and performance in managing their environmental impact,” says Eric Sinclair, president, TMX Datalinx, and group head of information services with TMX Group, in a statement. “As awareness of the effect of carbon emissions continues to grow, we believe investors will value these index offerings.”
The S&P/TSX 60 carbon efficient index is designed to measure the performance of companies in the S&P/TSX 60 index while overweighting or underweighting companies that have lower or higher levels of carbon emissions. The S&P/TSX 60 carbon efficient select index also measures the performance of companies based on their carbon emissions, but excludes those companies with the largest relative carbon footprint.
Trucost PLC, a London, U.K.-based firm that evaluates companies’ environmental performance, will calculate the carbon footprint for both indices. Trucost also conducts the research to quantify the environmental impact of the Global Sustainable Growth Equity Fund from Toronto-based AGF Investments Inc.
The S&P/TSX 60 fossil fuel free index measures the performance of companies in the S&P/TSX 60 index that don’t own fossil fuel reserves. RobecoSAM AG, a Zurich-based investment specialist focused exclusively on sustainability investing, conducted the research on the companies within this index to determine ownership of fossil fuel reserves.
“S&P Dow Jones Indices is excited to bring its expanding series of carbon-efficient and fossil-fuel free indices to the Canadian market and its leading benchmark, the S&P/TSX 60,” says Julia Kochetygova, head of sustainability indices, S&P Dow Jones Indices, in a statement. “With an increasing number of Canadian investors basing their investment decisions on how companies manage environmental issues, this S&P/TSX index series will provide an important and relevant benchmark within this space.”