By Yongchang Chin
Singapore Exchange Ltd. and Oversea-Chinese Banking Corp. Ltd. have jointly launched an index that tracks companies' carbon-intensity performance in a bid to help investors lower the carbon footprint of their investment portfolios, the companies said Monday in a joint statement.
The index, called the iEdge-OCBC Singapore Low Carbon Select 50 Capped Index, will comprise the top 50 companies domiciled or incorporated in Singapore based on their carbon-intensity performance, according to the statement.
The index constituents will be weighted by free-float market capitalization, although there will be a capped weighting mechanism to ensure diversification. "Mega cap stocks will be capped at 10%, while all other constituents will be capped at 7%," according to SGX.
The companies will be representative of Singapore's real and financial economy, the companies said.
The environmental and carbon intensity data is sourced from investment research company Sustainalytics.
Singapore has a target to reach net zero emissions by around the middle of the century, and will take steps including raising its carbon tax to progress toward that goal.
The country's current carbon tax stands at 5 Singapore dollars (US$3.67) a metric ton of greenhouse gas emissions, which Finance Minister Lawrence Wong said last month wasn't sufficient to meet the government's aim to get to net zero emissions. The tax will be raised to S$25 a ton from 2024 and then to between S$50-S$80 by 2030.
Write to Yongchang Chin at email@example.com
(END) Dow Jones Newswires