New Listing

DWS expands Paris-Aligned climate range with emerging market ETF

Launched following the reclassification of its PAB range to Article 8

Theo Andrew

a man in a suit

DWS has expanded its Paris-Aligned Benchmark (PAB) climate range with the launch of an emerging market equity ETF.

The Xtrackers Emerging Market Net Zero Pathway Paris Aligned UCITS ETF (XEMN) is listed on the Deutsche Boerse and the London Stock Exchange with a total expense ratio (TER) of 0.20%.

It comes just days after the German asset manager announced it was downgrading its entire PAB climate ETF range from Article 9 to Article 8 under the Sustainable Finance Disclosure Regulation (SFDR).

The 10-strong range consists of six equity ETFs and four fixed-income ETFs and was reclassified following ongoing regulatory uncertainty.

XEMN, which tracks the Solactive ISS ESG Emerging Market Net Zero Pathway index, will follow the same climate reduction targets as the rest of the range.

This means the ETFs will target a 50% reduction in carbon intensity compared to a traditional index as well as a reduction in carbon intensity of 7% per year.

Furthermore, the ETF will consider the recommendations of the Institutional Investors Group on Climate Change (IIGCC), meaning the indices do not weight the included stocks based solely on their carbon intensity.

Instead, the overweighting is based on the extent companies adopt science-based targets and the standards for climate reporting defined by the Task Force on Climate-related Financial Disclosures, DWS said.

Simon Klein (pictured), global head of passive sales at DWS, said: “With the new ETF, we now offer a full range of products aligned with the Paris Climate Agreement - giving investors suitable solutions for both developed and emerging markets.”

In September, DWS launched three PAB equity ETFs, tracking US, European and Japanese equities.

A month later, the firm added PAB climate metrics to its Xtrackers ESG USD Corporate Bonds UCITS ETF (XZBD) and the Xtrackers ESG EUR Corporate Bond Short Duration UCITS ETF (XZE5).

DWS’s ESG credentials have been under fire over the past few months following claims the asset managers used misleading sustainability claims in its advertising.

The allegations came less than six months after former DWS CEO Asoka Woehrmann stepped down after police raided its offices amid allegations of greenwashing.

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