Mumbai, January 30, 2008 - Standard
and Poor’s, CRISIL, and KLD Research & Analytics, the social and environmental
research firm, today announced the launch of the S&P ESG India Index,
the first investable index of companies in the country whose business strategies
and performance demonstrate a high level of commitment to meeting environmental,
social, and governance standards. The index provides investors with an
instrument to incorporate sustainability measures into their investment
decisions and will provide a model for the launch of similar indices in
other emerging markets.
Initiated and sponsored by IFC, a member of the World Bank group, this
pioneering Index comprises 50 Indian companies that meet certain ESG criteria
and have been drawn from the largest 500 companies listed on the National
Stock Exchange of India through a two-stage screening process. A detailed
methodology and fact sheet on the S&P ESG India Index are available
Subir Gokarn, Chief Economist, Standard & Poor’s Asia Pacific, observed,
“As the private sector becomes more important in the growth and development
of emerging economies, the profit motive needs to be brought into alignment
with the public interest. The scope of regulation, though critical, is
limited without a commitment by investors to reward strategic behavior
that creates long-term value by balancing the interests of all stakeholders.”
Dr. Gokarn has been associated with the project from its inception, including
in his earlier capacity as Chief Economist at CRISIL.
Rachel Kyte, Director of IFC’s Environment and Social Development Department,
added, “With growing pressure on investors to seek diversification and
returns by entering markets such as India, and with more and more investors
keen to invest in responsible firms, IFC hopes that the launch of this
index will be another important attempt to ensure that good performance
is rewarded in the market and that ‘best in class’ Indian companies can
access capital that is aligned with their success.”
Michelle Lapolla, Managing Director of Consulting Services at KLD, explained,
“We have been conducting in-depth, qualitative ESG analysis on companies
for 20 years. In this project, we have tailored our approach far more precisely
to the Indian context, taking into account disclosure and reporting standards
prevalent among Indian companies.”
Alka Banerjee, Vice President of Index Services at Standard & Poor’s,
said, “The S&P ESG India Index is unique because it links a company’s
ESG score to its index weightings, so that companies with higher scores
carry higher weightings. While the 50 companies that have been included
in the index are largely familiar names, their performance on ESG parameters
assures investors that their portfolio is consciously balancing the interests
of all stakeholders and thus creating a platform for strong long-term performance.”
IFC launched the Capturing Value grant competition, which initiated this
project, to provide emerging markets investors with better information
on companies’ environmental, social, and governmental performances. The
creation of this landmark ESG index is the result of a pioneering collaboration.
It draws upon S&P’s expertise in governance metrics and indices,
KLD’s experience and reputation on screening companies across all three
dimensions using public information, and CRISIL’s strong understanding
of the Indian business and regulatory context.
The S&P ESG India Index will be maintained by India Index Services
Ltd., a joint venture between CRISIL and the National Stock Exchange of
India, which also manages the flagship S&P CNX NIFTY index of India’s
largest and most liquid companies. For more information on Standard
& Poor’s emerging market and thematic indices, including methodology,
IFC, a member of the World Bank Group, fosters sustainable economic growth
in developing countries by financing private sector investment, mobilizing
private capital in local and international financial markets, and providing
advisory and risk mitigation services to businesses and governments. IFC’s
vision is that poor people have the opportunity to escape poverty and improve
their lives. In FY07, IFC committed $8.2 billion and mobilized an additional
$3.9 billion through syndications and structured finance for 299 investments
in 69 developing countries. IFC also provided advisory services in 97 countries.
For more information, please visit www.ifc.org.
About Standard & Poor’s Index Services
Standard & Poor's Index Services, the world’s leading index provider,
maintains a wide variety of investable and benchmark indices to meet an
array of investor needs. Its family of indices includes the S&P 500,
an index with $1.32 trillion invested and $4.91 trillion benchmarked, and
the S&P Global 1200, a composite index comprised of seven regional
and country headline indices. For more information, visit www.standardandpoors.com/indices.
CRISIL is India’s leading ratings, research, risk, and policy advisory
company. It offers domestic and international customers a unique
combination of local insights and global perspectives, delivering independent
information, opinions, and solutions that help them make better informed
business and investment decisions, improve the efficiency of markets and
market participants, and help shape infrastructure policy and projects.
Its integrated range of capabilities includes credit ratings and risk assessment;
research on India's economy, industries and companies; global equity research;
fund services; risk management and infrastructure advisory services. For
more information, visit www.crisil.com.
About KLD Research & Analytics, Inc.
KLD Research & Analytics, Inc. is an independent investment research
firm providing management tools to professionals integrating environmental,
social and governance factors (ESG) into their investment decisions. KLD
Indexes, a division of KLD Research & Analytics, constructs indexes
that are accepted as the benchmarks for ESG investment strategies. Investors,
trustees, and consultants depend on the quality and integrity of KLD Indexes,
which are designed to be transparent, representative, and investable. Today,
more than $11 billion is invested in funds based on KLD’s family of indexes.
For more information, visit www.kld.com.
Standard & Poor’s, CRISIL, and KLD Research & Analytics do not
sponsor, endorse, sell, or promote any S&P index-based investment product.