NSE Indices Limited, the index services arm of the National Stock Exchange (NSE), has introduced the Nifty500 Ahimsa Index, a thematic benchmark designed to track companies from the Nifty 500 universe whose business operations are aligned with the principle of “Ahimsa”, or non-violence.The index draws its constituents from the broad-based Nifty 500 universe, enabling diversified sectoral representation while giving preference to companies whose business practices exhibit a stronger commitment to responsible and sustainable principles.According to the company’s press release, the index has been created for investors seeking exposure to businesses that do not participate in activities considered harmful to animals. It has been developed jointly with the Ahimsagain Foundation and is based on the foundation’s Ahimsa Investment Movement (AIM) framework.
Nifty500 Ahimsa Index
The AIM framework assesses companies by evaluating how closely their products, services and business practices adhere to Ahimsa principles. The framework enables investors to make informed investment choices by identifying and avoiding companies linked to animal cruelty. It has assessed more than 1,100 companies listed on the NSE and BSE using the AQ Framework. AIM has also partnered with HDFC for for HDFC Growth for GOOD PMS.The Nifty500 Ahimsa Index has April 1, 2016, as its base date and a base value of 1,000. It will undergo reconstitution twice a year, with the weight assigned to each constituent determined by its free-float market capitalisation.With the introduction of this benchmark, NSE has further expanded its range of thematic and ESG-focused indices, providing investors with an opportunity to incorporate ethical screening into their portfolios while maintaining exposure to the broader Indian equity market. Market participants said the index has the potential to attract both domestic and overseas investment funds that are increasingly incorporating values-based screening into their equity investment strategies.The Existing Ethical Investing Landscape
How does it work?
Based on the AIM assessment, companies are categorised into Green, Orange and Red bands. Only companies classified under the Green band qualify for inclusion in the index, while those placed in the Orange and Red bands are excluded.NSE Indices said the launch represents another addition to its expanding portfolio of index offerings, aimed at meeting the changing preferences of investors.“As investment preferences continue to evolve, the index offers market participants a transparent, rules-based benchmark that integrates ethical considerations with broad-based equity market exposure,” the exchange said.It is intended to function as a benchmark for asset managers and support the creation of passive investment products such as Exchange Traded Funds (ETFs), index funds and other structured investment vehicles.
Focus on clean investing
India has seen the launch of several green thematic indices in the last few years such as; Nifty100 ESG Index, Nifty100 Enhanced ESG Index, Nifty Midcap150 ESG Index etc.These indices have helped align with global investment trends around ESG and sustainable investing.Institutional investors are increasingly incorporating non-financial risks such as climate change, governance and social responsibility into their investment decisions. According to a recent Bloomberg report, green economy companies, which comprises the business segments of listed companies that earn revenue from climate-related solutions, reached a record market valuation of $10 trillion.The revenue generated from environmental products and services increased to $5.5 trillion last year, marking the fastest pace of growth since 2022, according to a report released by the London Stock Exchange Group.The strong expansion has also been reflected in investor sentiment. According to LSEG, companies that generate more than 20% of their revenue from green businesses have outperformed the wider equity market. Since the end of 2024, the S&P Global Clean Energy Transition Index has climbed by more than 80%, delivering gains that are more than twice those of the S&P 500.
