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Nov 09, 2014

Turkish stock exchange launches sustainability index

Fifteen-member index to be reviewed annually based on performance related to human rights, climate change, bribery and board practice

Borsa İstanbul (BIST), the Turkish stock exchange, has launched its first sustainability index as it seeks to boost foreign investment and increase local awareness of ESG issues as they apply to Turkish companies.

The BIST Sustainability Index gauges members of Turkey’s benchmark BIST 30 Index for a series of sustainability criteria devised by EIRIS, an international firm that researches ESG performance of companies, and local researchers from the Sabanci University Corporate Governance Forum of Turkey.

The index includes 15 members that have been analyzed regarding a series of issues including biodiversity, climate change, environment, human rights, health and safety, bribery and board practice, EIRIS says. The index will be reviewed annually and, in a coming revision, will draw from members of the broader BIST 50. The companies that beat a pre-set threshold of ESG performance factors are included in the index.

‘The BIST Sustainability Index will encourage Turkish companies and investors to give careful consideration to the value of ESG factors in long-term sustainable wealth creation,’ says Peter Webster, CEO of EIRIS, in a news release. ‘It also signals to global investors a seriousness to explore these questions in Turkey at a time when many other stock exchanges around the world are looking for models of how to enhance sustainability and transparency.’

This year’s members include Petkim Petrokimya Holding, banks Yapi Ve Kredi Bankasi, Akbank and Garanti Bankasi, mobile operator Turkcell, industrial conglomerate Koç Holding and Tofas Turk Otomobil Fabrikasi, an automotive company.

BIST chairman and CEO İbrahim Turhan says the exchange is a signatory to the UN Principles of Responsible Investment and one of four founding members of the Sustainable Stock Exchanges Initiative, and intends to work further toward promoting responsible investment.