India gets its own SRI index

India has become the latest emerging market to have a dedicated index of companies that demonstrate superior social and environmental performance.

The universe of Standard & Poor’s ESG India Index is the 500 largest companies listed on the National Stock Exchange of India, which are initially ranked on the basis of their disclosures on governance, the environment and social issues. The 150 best performers are then assessed using media reports and other information sources and the two scores combined to identify the 50 index constituents.

An unusual feature is that each company’s weighting is assigned on the basis of its social and environmental performance and not by market capitalization alone.

Infosys Technologies is the top constituent, comprising 2.88 per cent of the index, which has a total market capitalization of $338bn (£169bn). Hindustan Unilever and ITC Ltd (both consumer staples) and Reliance Industries (energy) are also in the top ten.

The other consortium members are India-based rating advisory firm CRISIL and US-based KLD Research & Analytics.

Similar indices have been set up in Brazil, Israel and South Africa partly in an effort to improve information flows to investment managers holding SRI mandates.