A new index launched by Latin American exchange BM&FBOVESPA and the Brazilian development bank BNDES will track the greenhouse gas emissions of Brazilian companies.
The Carbon Efficient index, or ICO2, tracks the return of a hypothetical portfolio consisting of companies in the Brazilian IBrX-50 index that join the ICO2, according to a news release from BM& FBOVESPA and BNDES. The first portfolio will be made up of 48 companies.
The index will be rebalanced quarterly based on companies' free float, and annually based on their emission coefficient, according to the release.
“The exchange opted for an inclusive methodology in the first year of the index,” the release stated. “This means presentation of emission inventories was not obligatory, but companies did have the opportunity to supply contributory information for an estimate of their CO2 emissions.”
In 2011, companies in the index will be obliged to report direct and indirect emissions resulting from electricity consumption.
Neither a BM&FBOVESP nor a BNDES spokesman could be reached for comment.