The SZSE will introduce a mechanism which would automatically exclude from the index any stocks with an ESG rating below B.
The Shenzhen Stock Exchange (SZSE) is revising the ChiNext Index to incorporate ESG considerations and limit the influence of individual stocks, aiming to make the index more robust and attractive to investors.
The adjustments are aimed at improving the index compilation method and enhancing investability.
The SZSE will introduce an ESG negative exclusion mechanism whereby stocks with an ESG rating below B will be excluded during regular adjustments.
In addition, a weight adjustment factor will be set so that the weight of a single stock does not exceed 20% during each regular adjustment.
The SZSE said the adjustments will reduce the probability of major risk events in index samples and control the impact of a single stock on the index within a reasonable range.
The adjustments will be implemented on 16 June 2025.