Mexican Stock Exchange Launches Sustainability Index

Mexican Stock Exchange Launches Sustainability Index 
    by Robert Kropp

Bolsa Mexicana de Valores selects EIRIS and Ecovalores to develop framework for an Index assessing the environmental, social, and corporate governance performance of Mexican companies.

SocialFunds.com -- Bolsa Mexicana de Valores (BMV), Mexico's stock exchange and the second-largest exchange in Latin America with a total value of stocks of more than $450 billion, announced today the launch of a new sustainability index. The methodology and assessment framework behind the index will be provided by EIRIS and the research firm's Mexican partner, Ecovalores.

The new sustainability index is based on the 70 most liquid shares on the Mexican Stock Exchange, EIRIS stated in a press release. Companies eligible for inclusion are assessed according to their performance, impact, and responses to emerging environmental, social, and corporate governance (ESG) issues. The issues include climate change, human rights, and policies and systems to counter bribery.

In order to be eligible for inclusion, companies will have to score in the top 50% of performers in their industry sectors.

The Mexican sustainability index is the third for which EIRIS will provide a framework. The firm already does so for the FTSE4Good Index Series and the Johannesburg Stock Exchange's (JSE) Socially Responsible Investment (SRI) Index.

In 2009, the World Federation of Exchanges (WFE), a trade association of 53 publicly regulated stock, futures, and options exchanges, issued a report based on surveys of its members.

Identifying climate change and the transition to a low-carbon economy as key drivers of the entry into mainstream investment of the priorities of sustainable investors, the report asks, "How can exchanges help to shape the way that regulatory conditions and reforms facilitate ESG transparency and sustainable investment flows?"

Describing the collaboration with BMV as "part of our wider work with stock exchanges around the world," Peter Webster, Executive Director of EIRIS, said, "Stock exchanges around the world—particularly those in emerging markets—are embracing the view that they have a key role to play in promoting sustainability and greater disclosure by their listed companies."