Index providers launch Indian SRI first
London, 31 January: Standard & Poor’s, CRISIL and KLD Research & Analytics have launched what they say is the first socially responsible investment (SRI) index of Indian companies. The S&P ESG India Index tracks the leading 50 companies, out of a universe of 500, which scored most highly against environmental, social and governance (ESG) criteria.

The largest constituents include Infosys Technologies, Reliance Industries, Hindustan Unilever and Aditya Birla Nuvo. Companies with higher ESG scores carry a higher weighting in the index.

The development of the index was backed by the International Finance Corporation (IFC), the private sector arm of the World Bank Group. CRISIL, an India-based rating agency, and Boston-based SRI firm KLD won last year’s Capturing Value competition, run by the IFC, with the proposal to construct such an index.   

Rachel Kyte, director of the IFC’s environment and social development department, said: “With growing pressure on investors to seek diversification and returns by entering markets such as India and with more and more investors keen to invest in responsible firms, IFC hopes that the launch of this index will be another important attempt to ensure that good performance is rewarded in the market and that ‘the best in class’ Indian companies can access capital that is aligned with their success.”

“The index provides investors with an instrument to incorporate sustainability measures into their investment decisions and will provide a model for the launch of similar indices in other emerging markets,” said the organisations in a statement.

“We have been conducting in-depth, qualitative ESG analysis on companies for 20 years,” said Michelle Lapolla, managing director of consulting services at KLD. “In this project, we have tailored our approach far more precisely to the Indian context, taking into account disclosure and reporting standards prevalent amongst Indian companies.”

The S&P ESG India Index will be maintained by India Index Services, a joint venture between CRISIL and the National Stock Exchange of India. More details are available at www.standardandpoors.com/indices