Brazil stock exchange launches $500 billion sustainability index

Businesses in new portfolio make up 47% of the exchange’s total value, including power, ICT and banking sectors

(Pic: jfjwak/Flickr)

(Pic: jfjwak/Flickr)

By Ed King

Companies valued at just under US$500 billion have signed up to the Brazil stock exchange’s latest Corporate Sustainability Index.

Shares in the 40 businesses in the new portfolio are worth 1.14 trillion Brazilian Real, 47% of the exchange’s total value, and include Brazil’s national bank, Latin America’s largest power utility Electrobras and telecommunications multinational TIM.

Introduced nine years ago, the Index covers 18 sectors. Diverse Financial Services, Transport Material and Medical, Hospital, Analysis and Diagnostic Services were added this year.

“We have heard from investors that when they are part of our index they look at those companies with different eyes,” Sonia Favaretto from BM&FBOVESPA told RTCC.

“They see companies as more responsible, more concerned about corporate governance issues, impacts and risks.”

Based in São Paulo, BM&FBOVESPA is the 13th largest trading exchange in the world, with 470 listed companies from Brazil and across Latin America.

Brazil is Latin America’s largest economy, and the sixth biggest in the world based on GDP. Sugar, soya, iron ore and oil make up its largest exports.

Favaretto says pressure from European investors is one of the main reasons why the sustainability index has flourished, but adds that sustained momentum depends on how seriously world leaders take issues like climate change.  “It’s growing, but we depend on the global movement,” she said.

In 2011 the Index added specific questions on climate change risk to its social and environmental categories.

Before 70% of companies did not take this into account; now Favaretto says 74% report on the risks posed by global warming.

All companies in the index have to publish a sustainability report, and have a commitment to Sustainable Development in their overall strategy.

Read more on: Climate finance |