Invesco is launching a range of global sector ETFs that aim to improve the carbon emissions and ESG profiles of the underlying companies. The Invesco S&P World Sector ESG UCITS ETFs will track the S&P Developed Ex-Korea LargeMidCap ESG Enhanced Sector Indices, a new series of benchmarks created by S&P Dow Jones Indices for sustainable sector investing. The four ETFs offer exposure to the world energy, financials, health care, and information technology sectors. The indices exclude securities involved in tobacco, controversial weapons, oil sands, small arms, military contracting or thermal coal, non-compliant with UN Global Compact principles, low ESG scoring, high carbon intensity levels, or facing potential ESG risk incidents and/or controversial activities. The remaining securities are then optimized and re-weighted to achieve an uplift in the S&P DJI ESG score and a 30% decrease in carbon intensity relative to the standard index.
ETF Newz Says:
These new ETFs could have the potential to deliver meaningful and measurable improvements above and beyond exclusions alone, while avoiding the risk of having an outsized weight in a small number of stocks.