Carbon efficiency and fossil-intensity will be the focus of three new subindexes the Toronto Stock Exchange (TSX) is setting up to track the environmental performance of the companies that trade on the exchange.

The S&P/TSX 60 Carbon Efficient Index will rate Canada’s 60 largest companies based on their carbon intensity, with the most carbon-efficient firms receiving a larger share of the index. The S&P/TSX 60 Carbon Efficient Select Index will do the same, but exclude stocks with the largest relative carbon footprint. And the S&P/TSX 60 Fossil Fuel Free Index will “measure the financial performance of companies in the S&P/TSX 60 that do not own fossil fuel reserves,” CBC reports.

The indexes “recognize Toronto Stock Exchange issuers included in the S&P/TSX 60 for their efforts and performance in managing their environmental impact,” said TMX Datalinx President Eric Sinclair. “As awareness of the effect of carbon emissions continues to grow, we believe investors will value these index offerings.”

While investors won’t be able to use the indexes for direct transactions, CBC notes that mutual funds and other “financial product makers” often create products that track stock market indexes. “So a new round of climate change-focused ETFs [Exchange Traded Funds] and mutual funds that investors can buy and sell are a distinct possibility in the near future.”

“With an increasing number of Canadian investors basing their investment decisions on how companies manage environmental issues, this S&P/TSX index series will provide an important and relevant benchmark within this space,” said Julia Kochetygova, head of S&P’s sustainability indexes.