Nasdaq launches new Sustainability Index

The Nasdaq has this week become the latest exchange to launch a corporate sustainability index, providing investors with information on how businesses are performing against their peers from an environmental and social perspective.

The company said it had teamed up with research firm CRD Analytics to launch the Nasdaq OMX CRD Global Sustainability 50 Index, featuring firms that voluntarily report on over 150 financial, sustainability and social metrics, including carbon footprint, energy usage, water consumption, hazardous and non-hazardous waste levels, and employee and community issues.

CRD Analytics president Michael Muyot said the index would help make " sustainability more investable", providing investors with an independent assessment of how firms that have taken a leadership position in environmental reporting are performing against their peer group.

The new index was launched just days after banking giant HSBC released its quarterly Climate Index update, which tracks the performance of firms focused on low carbon and climate change sectors.

The report found that firms focused on energy efficiency and energy management have recorded the best performance in the past year, enjoying a 20 per cent premium over the rest of the index.

HSBC said that this premium was justified as it companies focused on energy efficiency and energy management have received the greatest share of global economic stimulus funds.

The report also found that companies focused entirely on low carbon products and services are continuing to outperform the wider stock market and firms that have only a partial focus on climate change. It said that pure play climate stocks have outperformed the HSBC Climate Index and global equities by 45 per cent and 43 per cent respectively.