BM&FBOVESPA and BNDES announce development of stock index focused on carbon emissions

BM&FBOVESPA and BNDES announce development of stock index focused on carbon emissions

Based on the IBrX-50 index, the Carbon Efficient Index will weigh companies’ GHG emissions

São Paulo, 15 December 2009 – The Brazilian Security, Commodities and Futures Exchange (BM&FBOVESPA) and the Brazilian Development Bank (BNDES) announced today, during the 15th United Nations Climate Change Conference (COP15), in Copenhagen, the development of the Carbon Efficient Index. The objective of this index is to stimulate listed companies to reduce their emissions of greenhouse gases (GHG) and adopt environmental practices. The index will be weighed by the inventory of GHG emissions that result from all the activities associated to a company.

The Carbon Efficient Index will be structured in 2010, based on the Brazil Index 50 (IBrX-50), which is composed by the 50 most traded stocks at BM&FBOVESPA, weighed by free float. The weight of each stock on the new index will be based on the company’s participation on the IBrX-50 index and also its GHG emissions efficiency. This is measured by the relation between these GHG emissions and the company’s revenue, the smaller this relation is, the greater the efficiency. 

Therefore, companies with more GHG emissions efficiency, in relation to the other companies of the same sector in the portfolio, may have a bigger weight in the new index, in comparison to their participation in the IBrX-50 index. On the other hand, less efficient companies, in terms of GHG emissions, will have a reduced participation in the new index.

The index’s goal is to motivate the most heavily traded Brazilian companies to measure and manage their GHG emissions; to bring more transparency about these emissions; and create an investment opportunity for environmentally aware investors. Both BNDES and BM&FBOVESPA firmly believe that this collaboration will help foster a sustainable corporate environment and prepare companies for a future economy of low carbon emissions.