China Green Finance Task Force Report: Stock Index
Traditional energy and other highly polluting industries account for a significant share of China’s major stock indices, meaning that passive investments based on stock indices encourage investment polluting industries. Creating green stock indices (stock indices with a significant share of green enterprises) is an international practice to increase the share of green investment by institutional investors. China is still in an embryonic stage of creating and promoting green and sustainability indices. This paper recommends China should:
- Draw on international models experience to develop green and sustainability stock indices
- Improve the environmental and sustainability information disclosure of listed companies and encourage non-profit research institutions and third-party agencies to rate the sustainability performance of enterprises.
- Vigorously promote the application of green indices among institutional investors
- Encourage asset management institutions to develop more targeted and diversified green and sustainable investment products such as a green industry theme funds