Shanghai Stock Exchange considers carbon index

carbon index

Shanghai’s Stock Exchange could soon be rating companies on their carbon emissions intensity. Creative Commons: Eric Schmutteenmaer, 2010

China’s Shanghai Stock Exchange could soon be ranking companies based on carbon emissions, according to reports out this week.

The stock exchange is said to be considering plans to launch a new index that would see listed companies ranked based on their emissions intensity, having asked the China Securities Regulatory Commission to impose mandatory carbon reporting rules.

If approved the new rules could allow it to benchmark nearly 1,000 listed firms based on how much carbon they emit each year per unit of revenue.

According to reports from Reuters, the stock exchange has asked for the rules as companies have been unwilling to voluntary release the data on their emissions.

The new index could allow traders to invest in products associated with companies that are less exposed to fossil fuel risks if China and the world were to step up efforts to cut emissions and mitigate climate change.

China is in the process of launching a series of carbon trading pilot schemes across the country.

The schemes will collectively cover at least 700 million tonnes of annual CO2 emissions.

Shanghai launch its emissions trading scheme last year, forcing local firms to report their emissions. So far the data has not been made publicly available.

But a separate piece of research, released last week, has warned that China’s continued pursuit of resources – and the country’s energy investments overseas – could put global progress to tackle climate change at risk.

In a report from the Brookings Institution, researchers argue that Chinese investments in Latin American countries like Brazil, Venezuela and Costa Rica could hike the region’s carbon footprint.

This in turn, they warn, could influence the negotiating position of these countries’ – often seen as progressive when it comes to climate change – at the UN climate talks.

The report warns that while trade with China is key to boosting economic growth in the region, “building a high-carbon partnership could be disastrous for Latin and the world in the long-term.”

The report comes as Latin America takes an increasingly high profile in the climate negotiations. Peru will be the host of this year’s climate talks in December, where countries are expected to deliver a draft version of a new global treaty on climate change.

With the negotiating session taking place in Peru, and the pre-conference meeting in Venezuela, the spotlight will firmly be on the region, and the role it plays in driving any new climate agreement.

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