Barclays MSCI Green Bond Index's "robust criteria" was hailed by the Green Bond Awards judges, who voted it Best Index.
One judge said it had "the most robust criteria", while another described it as "the gold standard".
"By far the most unique element of the index is that we do research and due diligence on every green bond to make sure it's eligible," says Laura Nishikawa, executive director of research at
MSCI. "It's the only index I know of that's applying a green set of criteria in this way."
2016 was an eventful year for the index, as it announced the results of a review of its listing rules following an extended market consultation.
The index clarified its criteria surrounding hydropower, saying that large projects need to score three or above on the Hydropower Sustainability Protocol or meet the eight IFC performance standards.
It also clarified its assessment of project pools to say that at least 90% of the use of proceeds must go towards eligible projects.
As a result, two green bonds from GDF Suez (now called Engie) with a combined value of 2.5 billion were expelled because more than 10% of the proceeds are used for a controversial hydro project in Brazil.
And it also clarified its rules around how quickly issuers should file annual reports.
"Having a public set of criteria and making them known, and all the outreach we have done have helped bring some consistency to the market," adds Nishikawa.
The index continues to evolve, having recently changed its rules to allow the inclusion of Treasuries, such as the French €7 billion green bond.
The index is tracked by some green bond funds, including ones run by BlackRock and State Street. Other financial institutions use it as a benchmark.