Stock markets join cleantech index gold rush

Two of the world's biggest stock exchanges, FTSE and NASDAQ have this week announced plans for new indices designed to serve booming demand from environmentally conscious investors.

FTSE said yesterday that it has teamed up with cleantech-focused investment firm Impax to launch a new index dedicated to tracking investments in alternative energy and energy efficiency, water treatment and pollution control, and waste technologies and resource management.

The FTSE Environmental Opportunities All-Share Index is made up of 450 constituents, each of which must demonstrate that at least 20 per cent of their business comes from environmental markets or technologies.

Will Oulton, head of responsible investment at FTSE, said that the index would appeal to both institutional and retail investors who want to gain exposure to and track the performance of clean tech firms.

The company added that it was planning to continue to work with Impax to develop further indices for tracking the environmental investment sector.

Meanwhile, NASDAQ OMX Group said this week that it was to introduce a series of Carbon indices designed to both underpin derivatives trading and provide a benchmark for the global carbon market. The company said that the new indices would make it easier for investors to enter the carbon market and gain an accurate picture of how their investments are performing.

This year has already seen a number of cleantech and carbon indices emerge as investors look for means of gauging the success of their investments and start to demand more sophisticated structured products.

UBS launched an index to track carbon prices and temperature rises back in January, while Barclays capital also debuted an index for the carbon market and Impax and FTSE have previously launched the FTSE ET50 Index, made up of the lar gest 50 pure play environmental technology companies by market capitalization.