Banks warm to green products
Bankers have wasted little time trying to cash in on the interest in the environment that has emerged as a key issue among socially responsible investors.
Will investors clean up? Société Générale, which has an emissions trading joint venture with French chemicals company Rhodia called Orbeo, recently launched the SGI-Orbeo Carbon Credit Index and the SGI Global Carbon Index.
The SGI-Orbeo Carbon Credit Index tracks the performance of carbon in the carbon market by looking at both EUAs and CERs, and the SGI Global Carbon Index aims to capture the performance of the top 30 stocks issued by companies whose operations have the lowest carbon intensity among the most heavily impacted sectors, including transport, energy, utilities, capital goods and materials.
It is hard to find a purer play on the global warming theme than the UBS Global Warming Index, which provides direct exposure to global warming through weather derivatives.
This April Merrill Lynch broke new ground in the carbon credits business by completing the first independently validated, commercially financed avoided-deforestation project.
The project, in the Indonesian province of Aceh, will protect 750,000 hectares of pristine rainforest, avoiding 100 million tonnes of CO2, equivalent to offsetting 50 million flights between London and Sydney, and generate voluntary CERs.