The new development is a major win for Kenyan companies, which have started carbon emission reduction investment projects or are planning.

It means projects undertaken by these companies will now be tracked by global investors who can possibly put their monies in them.

Mumias sugar Company's electricity, ethanol and mineral water production from sugar waste and KenGen's geothermal power projects are some of the high profile climate change investment projects in Kenya.

The new index and the funds will come in handy for other Kenyan companies that are pursuing carbon emission reduction projects. The smaller projects range from providing low-income people with more efficient wood fuel cooking jikos (charcoal stoves) to reduce amount of wood they use and the resulting soot, to developing of mini-hydro electricity projects from village streams.

These projects help reduce emission of carbon dioxide into the atmosphere, which in turn, helps to reduce global warming and subsequently reverse the rate of climate change.

The S&P/IFC Carbon Efficient Index is expected to encourage competition among emerging-market companies, give carbon-efficient companies access to long-term investment, and lead to important reductions in emissions in developing countries.

Rachel Kyte, IFC Vice President for Business Advisory Services, said the index will also offer businesses diversity to invest in emerging markets. It will also open up a new avenue for foreign direct investments flow into emerging markets.

She said it will take care of the "growing pressure" on investors to diversify and maintain returns by increasing exposure to emerging markets while offering them an opportunity to build on sustainable projects.

"IFC hopes that the launch of this index will help ensure that carbon efficiency is rewarded in the market and that best-in-class companies gain better access to capital," said Ms Kyte.

The index was developed by S&P using carbon data provided by Trucost, an environmental data provider that helps organisations, investors and governments to understand the environmental impacts of business activities.

The data will allow investors to closely track the performance of the S&P/IFC Investable Emerging Markets Index, expected to become a leading emerging-market benchmark.

"Investors will gain exposure to emerging markets and benefit from local rates-of-return while reducing the carbon footprint of their portfolios by 24 per cent," said IFC in a statement. "The S&P/IFC Carbon Efficient Index will be a [good] tool for investors seeking to reduce their carbon exposure in a broad portfolio covering emerging markets," said David Blitzer, Chairman of Standard & Poor's Index Committee.