A new index system designed to make companies reign in their carbon emissions has been launched today.

The Environmental Tracking index series is the brainchild of a British NGO, the Environmental Investment Organisation (EIO), who want to pressure companies by influencing where investors spend their money.

Sam Gill, Operational Director at the EIO said: “The logic behind the Environmental Tracking re-weight system is that it applies the most pressure to the most carbon intensive industries and the least pressure to the least carbon intensive industries.”

Although rather “hypothetical”, this threat of pressure could positively influence trading, he told ELN.

The index functions in a similar way to a normal financial index but re-weights them, either positively or negatively, according to their position in the EIO’s Carbon Ranking.

The Carbon Rankings are a list of FTSE 100 and EU 300 firms put in order according to their carbon emissions by the NGO. Companies which act to reduce their emissions jump to the top, while firms that don’t make their data public are pushed to the bottom of this list.

Mr Gill added that investors have been saying they want to know this sort of information because “there is a growing move towards investing money in a responsible way.”

Companies like Aviva, who ranked first place in both European and UK Carbon Rankings, agree that opening up data to the public helps.

When the rankings were announced, Marie Sigsworth, Group Corporate Responsibility Director at Aviva said the firm “strongly support the emphasis that the Environmental Investment Organisation places on disclosure.”

Mr Gill suggests that the tactic is working already, with two companies who hadn’t declared their carbon data subsequently releasing the information to get off the bottom of the Carbon Rankings table.