B3 has updated the ICO2 B3 methodology, valid from January 2025, expanding eligible companies and adopting new GHG emissions management criteria. With data collected via ESG Workspace, companies must be in the Broad Brazil Index (IBrA B3) and have a GHG Emissions Management Score above the sector average. Investors can access ICO2 B3 through ETFs like iShares ECOO11.

B3, the Brazilian stock exchange, has updated the methodology of the ICO2 B3, the Efficient Carbon Index, valid from January 2025. The new methodology expands the number of eligible companies and adopts new criteria for selecting companies committed to best practices in this agenda.

The indicator evaluates companies that stand out for the quality of their greenhouse gas (GHG) emissions management and show greater efficiency in the emissions-to-gross revenue ratio, contributing to the transition to a low-carbon economy. Data collection will be done through the ESG Workspace platform, which standardizes and centralizes ESG information from listed companies.

Under the new rules, to be included in the theoretical portfolio of ICO2, companies must be part of the Broad Brazil Index (IBrA B3), which currently includes 172 companies based on liquidity criteria. From this universe, companies need to be among the 75% that emit the least greenhouse gases proportionally to their revenue and, at the same time, have a GHG Emissions Management Score higher than their sector.

The score is calculated by B3 and is an indicator of the quality of carbon emissions management, evaluated according to the level of adoption of management practices indicative of improvement perspectives in the Emissions/Revenue Coefficient of the company.

The development of the new methodology involved B3, the National Bank for Economic and Social Development (BNDES), and Blackrock, manager of the iShares ECOO11 ETF, an index fund linked to ICO2, which has existed since 2011.

How to Invest in ICO2 B3?

Investors cannot invest directly in market indices, but they can buy shares of funds that replicate these indices, the ETFs (Exchange Traded Funds). Currently, B3 has ten indices focused on environmental, social, and governance themes. These indices can be replicated by funds or ETFs, whose return follows the performance of these assets—such as the ETF ECOO11, which replicates ICO2 B3.