New York – The Living Planet Fund, the investment arm subsidiary of conservation NGO WWF, launched its first environmental index, the Living Planet Green Tech Index, according to the Financial Times. Research and data from CA Cheuvreux will be crucial in the functioning of the index.
The index will benchmark companies listed in the stock exchanges of Western European countries which collect more than 20% of sales in green technology. Some of the green technology clusters to be included in the index are:
- Alternative energy and transportation
- Biomass resources
- Renewable energy
- Waste management, among others
Criteria such as market cap and minimum daily average trading volume have been established to guarantee the liquidity of the index.
S&P will calculate the index using an objective, formulae-based methodology proprietary to The Living Planet Fund. The methodology includes a green coefficient to determine the weightings of the stocks in the index. Separate US and Asian indices, based on this model, will be launched in the near future.
The Living Planet Fund partnered in this initiative with CA Cheuvreux, the broker research arm of Credit Agricole. Specifically, CA Cheuvreux provides data and research and calculates each company’s “green tech” turnover percentage according to its research. Research mechanisms employed by CA Cheuvreux include scrutiny of company websites, monitoring of annual reports, written questionnaires, liaison with companies, and tracking of publicly available information.
Also supporting the green tech index is Amundi Asset Management, a large asset management firm related to Credit Agricole and Societe Generale. Amundi has signed an exclusive license to launch an exchange traded fund (ETF) based on the LPTGE index.
The Living Planet Fund incorporates socially responsible investing criteria in its selection of companies considered as suitable for investment. Both financial and non-financial criteria are considered. Sectors excluded altogether from The Living Planet Fund’s investments include armaments, gambling, genetic engineering, nuclear power, fossil fuels, tobacco and alcohol.
The index is to be published in real time and denominated in Euros by S&P. Furthermore, the index level is published on Bloomberg and Reuters. The list of components and each stock weight are reviewed annually, in September.