ABN Amro launches climate change index

ABN Amro has launched an equity index tracking firms that address climate change and other environmental issues. Paul Thind, a London-based executive director at ABN AMRO, and the index developer, said: “This… benchmark reference instrument can be used both to invest in the growth potential of the market addressing climate change and also effectively manage and measure risk associated with these issues.” The Climate Change & Environment Index comprises 32 stocks, each with a market capitalisation of at least €600 million ($800 million) and daily liquidity of €1 million. “We look at the ones we can viably invest in,” explained Thind. Renewables make up a total of 45% of the index, while water companies make up 25%, followed by waste management at 20%. Other sectors include platinum and palladium mining and geothermal. “We did a measure of the economic importance of each of these sectors,” said Thind. Although the index is not pure-play, large firms must earn at least $1 billion a year from their activities in one of these sectors in order to be included. The index includes Birmingham-based water utility Severn Trent and Paris-based environmental services firm Veolia Environnement, both at 6.25%. Danish turbine manufacturer Vestas Wind Systems makes up 2.5% of the index, while South Dakota-based ethanol firm VeraSun makes up 4%. Image source: nature.orgNews selected by Covalence | Country: Global | Company: ABN Amro | Source: Environmental Finance