New index focuses on best in class carbon footprint companies

Merrill Lynch has introduced a new index which focuses on best in class carbon footprint companies with favourable valuation characteristics as Merrill Lynch and Trucost identify European carbon leaders: The Merrill Lynch carbon leaders Europe index (MLCLE).

Trucost's proprietary modelling for carbon calculation coupled with Merrill Lynch’s rigorous business analysis was used to rank companies by both carbon footprint and valuation, to provide investors with exposure to ‘best in class’ companies on a sector neutral basis.

MLCLE is the first major index to use carbon footprints as a selection criterion, focusing on blue chip corporations. It is not a ‘clean tech fund’ or similar product.

Simon Thomas, chief executive of Trucost, said: “Carbon Leaders substantiates Trucost’s long held view that mainstream investment decisions will increasingly have to factor in companies' carbon exposure. Only Trucost is in a position to judge this exposure accurately and robustly enough for mainstream financial products.”

"The ML Carbon Leaders Europe Index offers investors exposure to a high quality, low carbon footprint basket of stocks using a valuation framework that has been shown to outperform during all stages of the economic cycle." said Zoe Knight, senior director of socially responsible investing at Merrill Lynch.