FTSE Russell, an index provider part of the London Stock Exchange Group (LSEG), has launched a green revenue index for the Chinese market. The index was developed in collaboration with the China Securities Index Company Limited and Shenzhen Securities Information Company Limited.
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The index covers 100 securities in China’s A-share market. Companies are chosen based on their green revenue exposure. The methodology leverages LSEG’s green revenue data model.
The model, originally developed over a decade ago, includes a green revenue classification system across 10 sectors. The list includes energy generation, energy efficiency, transport, pollution control and water infrastructure among others.
According to disclosures from the China Securities Index Company, the index includes securities from utilities, wind and solar generation companies, electric vehicle manufacturers as well as China’s largest battery technology companies. EV behemoths BYD and CATL are both part of the list.
In a statement, FTSE Russell said the new offering was responding to ‘growing investor demand for transparent, investable, and sustainability benchmarks within China’s equity markets’.
“We are pleased to partner with CSI and SSI on this important initiative. It aligns closely with the priorities set out in the 11th UK–China Economic and Financial Dialogue and reflects our long-term commitment to supporting the continued development of China’s capital markets, including enhancing investor access to companies driving the transition to a greener economy” commented FTSE Russell chief executive Fiona Bassett.
In June this year, FTSE Russell developed a green bond index for offshore RMB-denominated green bonds. The ‘Dim Sum’ index, was jointly developed with the China Construction Bank.
The new green revenue index therefore expands LSEG and FSTE Russell’s China offering -- a product range largely developed in response to rising investor interest in China’s energy transition.
