Nifty100 Enhanced ESG
Nifty100 Enhanced ESG Index is designed to reflect the performance of companies within Nifty 100 index based on Environmental, Social and Governance (ESG) risk score. Companies with severe category risk are excluded from the index. The weight of each constituent in the index is tilted based on ESG risk score assigned to the company, i.e. the constituent weight is derived from its free float market capitalization and modified ESG risk score.
The index can be used for a variety of purposes such as benchmarking, creation of index funds, ETFs and structured products.
To form part of the Nifty100 Enhanced ESG Index, stocks should qualify the following eligibility criteria:
- Stocks should form part of Nifty 100.
- Companies should have an ESG risk score.
- Companies with severe category risk will be excluded.
- Companies with a controversy category of 4 and 5 will be excluded (scale: 1-5, category 1 being least controversial).
- Companies engaged in the business of tobacco, alcohol, controversial weapons and gambling operations shall be excluded.
The number of constituents in the index is variable. Weight of each stock in the index is based on its free-market capitalization and modified ESG risk score. Index has a sector cap, and each constituent is capped at lower of 8% or 5 times of the weight of the stock in the index based only on free-float market capitalization. Index is reconstituted on a semi-annual basis.
Nifty100 Enhanced ESG Methodolgy
• The index has a base date of April 01, 2011 and a base value of 1000
• To form part of the Nifty100 Enhanced ESG Index, stocks should qualify the following eligibility criteria:
• Stocks should form part of Nifty 100.
• Companies should have an ESG risk score.
• Companies with severe category risk will be excluded.
• Companies with a controversy category of 4 and 5 will be excluded (scale: 1-5, category 1 being least controversial)
• Companies engaged in the business of tobacco, alcohol, controversial weapons and gambling operations shall be excluded.
The number of constituents in the index is variable. Weight of each stock in the index is based on its free-market capitalization and modified ESG risk score. Index has a sector cap, and each constituent is capped at lower of 8% or 5 times of the weight of the stock in the index based only on free-float market capitalization. Index is reconstituted on a semi-annual basis. For more details refer the equity index methodology document.
Index Governance:
A professional team manages all NSE indices. There is a three-tier governance structure comprising the Board of Directors of NSE Indices Limited, the Index Advisory Committee (Equity) and the Index Maintenance Sub-Committee.
• To form part of the Nifty100 Enhanced ESG Index, stocks should qualify the following eligibility criteria:
• Stocks should form part of Nifty 100.
• Companies should have an ESG risk score.
• Companies with severe category risk will be excluded.
• Companies with a controversy category of 4 and 5 will be excluded (scale: 1-5, category 1 being least controversial)
• Companies engaged in the business of tobacco, alcohol, controversial weapons and gambling operations shall be excluded.
The number of constituents in the index is variable. Weight of each stock in the index is based on its free-market capitalization and modified ESG risk score. Index has a sector cap, and each constituent is capped at lower of 8% or 5 times of the weight of the stock in the index based only on free-float market capitalization. Index is reconstituted on a semi-annual basis. For more details refer the equity index methodology document.
Index Governance:
A professional team manages all NSE indices. There is a three-tier governance structure comprising the Board of Directors of NSE Indices Limited, the Index Advisory Committee (Equity) and the Index Maintenance Sub-Committee.
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