FTSE Russell has launched an enhanced Green Revenues 2.0 Data Model to measure the green revenue exposure of companies in nearly 50 markets around the world.
The Green Revenues 2.0 Data Model provides investors with a comprehensive classification system covering green products and services in 10 sectors, 64 sub-sectors and 133 micro-sectors and 16,000 listed companies across 48 developed and emerging markets. This represents 98.5% of the total global market value of listed companies, FTSE Russell said.
FTSE Russell also applies a green 'tiering' system to determine net environmental impact based on seven environmental objectives, to reflect that green revenues come in lighter and darker 'shades'.
The three tiers rank sources of green revenue as Limited, Net Positive and Clear and Significant, allowing investors to develop a clearer understanding of the level of green exposure in a portfolio.
"FTSE Russell's enhanced Green Revenues 2.0 Data Model is a powerful tool that investors can use to quantify a company's contribution to the green economy in a single percentage of revenue figure," said Arne Staal, global head of research and product management, FTSE Russell. "A high degree of overlap with the incoming EU Taxonomy will also allow asset managers to demonstrate the proportion of a fund that contributes to the growing and dynamic green economy."
The data model can also be used for a number of regulatory reporting needs, including climate performance against Task Force on Climate-related Financial Disclosures (TCFD) requirements and EU Taxonomy regulation.
Over a decade of green revenues data is available, dating back to 2008, enabling investors to track a company's progress in achieving green standards, FTSE Russell said.
FTSE Russell's Green Revenues data model was launched in 2015 and serves as the underlying data to London Stock Exchange's Green Economy Mark, which is awarded to London listed companies with over 50% of green revenues.
Launched in 2019, the mark has been awarded to 86 issuers across London markets. The data model is also used to underpin several prominent index series including the FTSE Russell TPI Climate Transition index and the FTSE Environmental Markets Index series.
"Investors need access to high quality, comparable and relevant underlying data, available at scale, to support their sustainable investing strategies," Staal said. "FTSE Russell has been developing ESG index and data products for almost twenty years to help meet investor requirements to incorporate sustainable investments into their portfolios. Our green revenues datasets are being used in a multitude of ways including in the FTSE TPI Climate Transition Index, which provides increased exposure to the opportunities arising from the global green economy."