Shanghai Stock Exchange Launches SSE 180 Carbon Efficient Index With China Securities Index

(3BL Media/Justmeans) – China’s months-long stock market crisis has affected markets around the world. In recent weeks, five trillion dollars in value has been wiped away as investors sold shares over fears about the country’s slowing economy. It has been a turbulent time. However, there has been a glimmer of hope as China launched its first carbon efficient financial index, in a bid to direct capital towards its growing low-carbon industry. The SSE 180 Carbon Efficient Index, started by The Shanghai Stock Exchange (SSE) and China Securities Index, will identify low-carbon companies with financial performance that matches or exceeds their peers, but with significantly lower carbon emissions. The SSE 180 Carbon Efficient Index is designed to help financial institutions gain enhanced financial performance that lower exposure to carbon emissions provides.

China’s economic development strategy has strong emphasis on the need for green and low-carbon growth. As a result, Chinese companies are expected to further improve their environmental performance. The new index supports this transition by channelling capital towards better performing, carbon efficient companies. Liu Zhong, vice general manager of China Securities Index says, “In today’s China where green growth is the new norm, green indexes such as the SSE 180 carbon efficient index will provide the market with a great tool for green financial innovation, guiding more capital and more resources towards low carbon and green companies and industries, which will in turn accelerate the green growth economy.”

The Index was created with help from environmental consultancy Trucost, which assessed the carbon intensity of all companies in the benchmark index by analysing the environmental performance of more than 5,000 stock exchange listed companies and their supply chains worldwide. While the sector weighting in the carbon efficient index is consistent with that of its benchmark index, within each sector preference is given to lower emitters. Some highly carbon-intensive companies were excluded.

In other related news, China also saw the fourth chemical explosion in less than a month on 7 September 2015. This time the explosion was in Lishui, a city known for its picturesque landscape in the Zhejiang province of eastern China. An enormous explosion sent shock waves through the city of Tianjin, eastern China, on August 12 was the first of these incidents; this accident caused the deaths of more than 150 people. It was followed in quick succession by two separate explosions in Shangdong, a province just south of Tianjin.

These four explosions called into question the safety measures employed at the chemical plants. Concerns over environmental effects in the area surrounding the site of the blasts have caused transportation disruptions and school closures, preventing people from going to work. Local Chinese media speculates that there will be increased stringency announced in coming months. The launch of the SSE 180 Carbon Efficient Index will ensure that Chinese companies will further improve their environmental performance.

Photo Credit: China Securities Index