martes, 21 de agosto de 2012

Sustainability indices in emerging markets: impact on responsible practices

  Acabo de publicar este articulo en el Journal of Sustainable Finance and Investment.  Se puede leer en  http://bit.ly/PAmkJR


Sustainability indices in emerging markets: impact on responsible practices and financial market development
Antonio Vives
Department of Civil and Environmental Engineering, Stanford University, Stanford, CA 94305, USA;
Baljit Wadhwa
Global Environmental Facility, World Bank, Washington, DC 20433, USA
(Received 16 July 2012; final version received 22 July 2012)

ABSTRACT

Sustainability indices are generally created to serve as benchmark for sustainable investment.
In all markets, but particularly in emerging markets, these indices can also contribute to
stimulate responsible practices in companies that want to be part of the index and those that
are already members. Furthermore, they can contribute to the deepening of the capital
markets, not only by serving as a benchmark, but also by developing interest in responsible
investment on the part of foreign and domestic institutional investors. To play these roles,
the admission, selection and removal process of companies into sustainability indices must
have particular characteristics. For example, there should be a relatively large stock of
eligible companies. Furthermore, the investment environment in the capital markets must
also be relatively developed for investors to appreciate the long-term value of responsible
companies and analysts must have the right incentives to promote responsible investments.
Under certain conditions, the indices can also help to attract foreign capital, seeking
international diversification, to the local capital markets. Even though there are more than
50 general and specialized sustainability indices, there are only seven associated with stock
exchanges in developing countries: South Africa, Brazil, Egypt, Indonesia, China, India,
Turkey and Mexico. This study analyses the conditions that make for effective sustainability
indices in promoting capital market development and responsible practices and the impacts
that corporations and investors can expect. This study includes, as an example, evidence
from an evaluation of the impact of the BM&FBovespa Sustainability Index in Brazil.
We also include recommendations for the design of sustainability indices in emerging markets.

Keywords: sustainability indices; socially responsible investment; corporate social
responsibility; sustainability; financial markets; stock exchanges; emerging markets; Brazil