GLOBAL - FTSE Group has launched a fresh series of classifications and support tools which are designed to help investors identify companies providing environmental technolofy products and services, which could soon lead to the growth of environmental-focused ETFs.

A classification system of six sectors and 24 sub-sectors has been created to identify companies who want to exploit low-carbon business activities, so indices and products can be created and investments can be made with a strong responsible investment focus.

More specifically, it incorporates firms delivering energy efficiency alongside renewable energy providers - something not delivered by traditional indices according to Will Oulton, director of responsible investment at FTSE.

"We wanted to identify the characteristics of what products and services would constitute low carbon technologies," said Oullton.

"We have been working on the project for 18 months, with the assistance of Impax, the environmental specialists, to develop a set of benchmark tools for low-carbon technologies If 20% of [the businesses'] revenue or sources are from one or more of these sectors, we classify that company as an environmental opportunity," he added.

Approximately 1000 businesses have been identified globally, from developed and developing countries, through the classification process as eligible to fit the profile, of which 480 are liquid and investable enough to be considered an investment opportunity, according to Alton.

Some 17 indices have now been created for investors interested in responsible investment, with seven of those launched just this week, though the bulk of possible investments are considered to mid-cap in range.

At the same time, FTSE has been talking to ETF providers who want to create offerings with a low carbon focus, either on a regional or specific country bias.

That said, he acknowledged responsible investment ETFs would not be entirely new, as there are already a couple of such products on the market, such as water ETFs.

Similarly, the classifications could be adapted to products low carbon derivatives-based investments as well as mutual funds.

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