Understand how B3's efficient carbon index undergoes reformulation

B3’s Carbon Efficient Index (ICO2)  has reached its 11th portfolio in 2021. A change in methodology increased the number of companies included in it by 132%.

This is why, since January, the portfolio started to include companies belonging to the  IBrX 100 that formally submitted their greenhouse gas emission inventories to B3 in 2020.

Until then, only companies that were part of the IBrX 50 were invited to join the index; i.e. holders of the 50 most traded shares on the stock exchange.
“With more companies producing and disclosing their CO2 emission inventories, it made sense to expand the scope of the index to the 100 most liquid shares”, said Ana Buchaim, B3’s Director of People, Communications, Marketing and Sustainability. "The market, which is increasingly demanding investments linked to the ESG agenda, now has access to a less concentrated index, that is, more representative of the universe of companies concerned with the knowledge of their environmental impacts and making efforts to minimize them."

Portfolio Composition

Currently, the ICO2 B3 portfolio, that was balanced in May, comprises equity from 62 companies such as JBS, Fleury, Itaú, MRV and Natura.

The number of companies in the portfolio today is 132% higher than the portfolio that was in effect in 2020, consisting of 26 shares from 25 companies. The number of sectors also increased, from 13 to 22.

Among the new sectors represented are water and sanitation, beverages, trade and distribution for the health area, pension and insurance, chemicals, medical and hospital services, steel/metallurgy and telecommunications.

They were added to 13 other sectors that were already part of the index, such as processed foods, civil construction, electricity and financial intermediaries.

Index performance

Created in 2010, the ICO2 B3 performed 153.85% against Ibovespa’s  82.69% – as per the closing base on December 30, 2020. “We have data showing that the ISE B3, the ICO2 and the IGCT, indexes linked to ESG criteria, have performed better than Ibovespa’s over the years”, said Ana. “This reinforces our view that good management of companies and attention to ESG practices generate a more efficient company with good indicators.”