The Barclays announcement states that the BGCI provides the first index that will be available to asset managers, private banks and institutional investors looking for a comprehensive benchmark for the rapidly growing carbon emissions credit trading markets. The index is governed by the Barclays Capital Environmental Markets Index Committee, a newly formed independent body comprising representatives from the carbon industry and members of the institutional investment community. The Committee has been provided a mandate to provide oversight to the development of the BGCI.
The BGCI initially comprises a combination of two sub-indices which track the performance of the carbon credits associated with the EU Emissions Trading Scheme (EU Allowances) and the Kyoto Clean Development Mechanism (Certified Emission Reductions). The Index will incorporate new schemes as they develop around the world.
“The BGCI adds to our growing family of benchmark index products and demonstrates Barclays Capital’s commitment to meeting investors’ needs for benchmarking and diversification in new asset classes. We plan on adding to the family over time to cover other emissions related schemes,” commented Waqas Samad, Head of Index Products at Barclays Capital.
Commenting on the launch, Harshika Patel, Head of Environmental Markets Product and Business Development, said: “Investors are increasingly seeking exposure to new commodity underlyers to diversify their portfolios. The BGCI offers investors direct and transparent access to the global carbon arena, which has the potential to become one of the world’s largest and most important commodities markets and we have recently expanded our team to reflect that.”
Louis Redshaw, Head of Environmental Markets, added: “The launch of this index is an important development in our environmental markets product offering. As we move towards the launch of the first phase of the Kyoto protocol and the second phase of the EU Emissions Trading Scheme, we expect the market to grow significantly as both corporations and investors look to manage their risks and leverage new opportunities. Barclays Capital is regarded as one of the major innovators in the emissions trading space, and with the addition of this product to our portfolio we are very pleased to be able to provide carbon risk solutions to the full spectrum of clients.”
Barclays Capital will provide support and analytics for these indices via Barclays Capital’s index website and other e-commerce channels, including Bloomberg. The indices are calculated daily and use standard settlement prices and market calendars most appropriate for international investors. Complete index rules are available in Barclays Capital’s new Barclays Capital Global Carbon Index Guide.