Following the example of advanced international markets, the president of the Athens stock exchange (ATHEX) Socrates Lazaridis will announce Tuesday the establishment of the first ESG index for the Greek equity market. This is an interesting development, which is expected to upgrade the Athens bourse, at a time when there is a large amount of investment activity seeking sustainability criteria. According to Business Daily sources, 30 companies (blue chips and mid-caps) will participate in the new index. The ultimate goal of the ATHEX management is to increase the figure to 60, the same number of companies forming the general index.
Among the top companies in the new ESG index will be stocks such as Mytilineos, which in the last two years has made large strides on ESG matters, Titan, that has among the highest emission reduction targets CO2 globally in its sector, PPC which has made a green shift with successive bond issues and set significant emission reduction commitments by 2024. Also participating will be Hellenic Petroleum, which has also entered a process of green transformation, Motor Oil, IPTO, Aegean Airlines, OTE, which is the first listed company in Greece to adopt ESG criteria for more than 15 years, as well as GEK TERNA and Terna Energy. Of course, all four systemic banks (Eurobank, Alpha Bank, National Bank and Piraeus) will participate in the index, as they have had multiple programs related to corporate governance and corporate social responsibility for many years.
From the mid-caps, companies such as Plastics Thrace, Kri Kri, Papoutsanis etc. are expected to participate in the Sustainability Index. It is noted that the weighting of shares in the ESG Index will not be the same for all shares, while it will be reviewed once a year.
Cooperation with NKUA university
The selection of companies that will make up the first ESG Index was made with the help of the National and Kapodistrian University of Athens (NKUA). In September 2020, the ATHEX management and the Union of Institutional Investors signed a memorandum of cooperation with the university, in order to help listed Greek companies become more sustainable. NKUA conducted a special study, through which the companies that meet the criteria for this index emerged. The study was carried out with the assistance of ATHEX. and the Association of Institutional Investors, through a questionnaire (ESG Diligence Questionaire) using indicators that record performance in terms of environment, society and corporate governance, which captured the ability of companies to create value and formulate effective strategies in the long run. The main aim of this cooperation is the channeling of investment funds to sustainable activities through sustainable investment products that facilitate the integration of ESG criteria by investors, such as stock market sustainability indices and certified green bonds.
Globally, investors are increasingly turning to socially and environmentally responsible companies and stocks, as they know that companies with high standards in these areas, normally have high quality standards throughout their structure and operation, while they are also considered to be particularly resilient stocks. Over the last three years, investments based on environmental development, social welfare and corporate governance practices have increased sharply.