Shanghai Stock Exchange is thinking about launching a carbon index

The Shanghai Stock Exchange is thinking about launching a new index ranking listed companies based on their carbon emissions intensity.

The stock exchange has asked China Securities Regulatory Commission to impose obligatory carbon reporting rules on listed companies that would allow it to benchmark its nearly 1,000 listed firms based on how much carbon they emit each year per unit of revenue. The stock exchange has decided this because it considers that companies were not willing to voluntarily release data.

China is in the process of launching a series of carbon trading pilot schemes across the country covering at least 700 million tonnes of annual CO2 emissions. The trading scheme in Shanghai launched late last year covering annual emissions from industrial facilities and power plants totaling 120 million to 130 million tons a year. However, the data on precise emission levels has not yet been released to the public.

Record high levels of air pollution in some of China’s major cities recently have also driven a wave of new environmental regulations.

The prospect of further regulatory pressure on China’s most carbon intensive firms is likely to provide an additional boost to clean tech providers.