Invesco today announced the launch of a suite of Exchange Traded Funds (ETFs) that aim to deliver meaningful improvements in environmental, social and corporate governance, while meeting specific goals linked to the United Nations-backed Paris Agreement on Climate Change. The new ETFs offer an option for exposure to US, European, Japanese and international stock markets, but emerging markets are also expected to enter the range in the coming weeks.
The range ETFs are rated Article 9. According to the SFDR rating.
“As world leaders implement initiatives to slow global warming, companies are key to success,” says Gary Buxton, Head of EMEA Indexed ETFs and Strategies at Invesco. “Our carbon footprint and many of them will also develop products and services to help us reduce our positive exposure to climate change, with meet broader environmental and environmental and social governance objectives.”
Invesco ETFs will replicate MSCI benchmarks aimed at reducing exposure to physical and transitional climate risks, while pursuing opportunities arising from the transition to a low-carbon economy, and alignment with the requirements of the Paris Agreement. Each index implements a wide range of exceptions. Other components have been optimized to reduce the carbon intensity to a level compatible with the 1.5°C warming, as well as to reduce the weighting of companies exposed to risks associated with climate change; maximizing the weighting of those most exposed to the chances of a climate shift; and reduced tracking error compared to the standard MSCI index.
Thibaud de Cherisey, Head of Distribution ETF (EMEA) at Invesco adds: “We are convinced that these new ETFs offer investors real added value compared to traditional equity risk. All responsible investors have very different profiles. A suite of solutions we have put in place that meets their goals. and their different priorities. These ETFs aim to strike a balance between specific climate goals and broader ESG goals, with a risk-return profile consistent with the expectations of most investors for an underlying portfolio.”
The ETFs will be physically invested in the securities of the respective indices. Invesco will exercise proxy voting rights, be guided by the global ESG team, and will communicate with recipient companies on key ESG issues.
These new launches bring Invesco’s portfolio of ESG ETFs to a total of 21 funds, including core equity funds, bond funds and clean energy topical exposures.
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