Europe’s first clean energy ETF incorporating carbon offsetting will launch this month.
The HANetf S&P Global Clean Energy Select HANzero UCITS ETF (ZERO) is set to list on the London Stock Exchange in June, with a total expense ratio (TER) of 0.55%.
Tracking the S&P Global Clean Energy Select index, ZERO will offer exposure to the 30 largest pure-play companies in the biofuel, fuel cell technology, geothermal energy, hydroelectricity, solar and wind industries.
While other clean energy indices exist, ZERO’s selling point is its carbon offset mechanism, which white-label ETF issuer, HANetf, said is the first to be incorporated within the European ETF wrapper.
ZERO will utilise monthly data from S&P Dow Jones Indices (SPDJI) to gauge the CO2 emissions produced by its Global Clean Energy Select benchmark.
It will then offset these through its HANzero projects provided by South Pole, which so far include the Topaiyo forest conservation project in Papua New Guinea and the Musi River hydro plant in Sumatra.
Crucially, the firm said associated costs from these projects will be taken from the ZERO’s TER and no extra costs will be passed onto the investor.
Commenting on the launch, Nik Bienkowski, co-founder and co-CEO at HANetf, said: “Environmentally conscious investors can now target capital growth with the ZERO, safe in the knowledge that any carbon emissions linked to their investment will be offset in some exciting global climate positive projects with our partners at South Pole.
“Investors are demanding action from their investment providers, and we are delivering new ESG features such as the carbon offset under our trademark HANzero.”
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Som Seif, founder and CEO of Purpose Investments, who has partnered with HANetf to launch ZERO, said: “The election of President Joe Biden has increased optimism about green policies as demonstrated by the US re-joining the Paris Agreement.
“The increased commitment by other leading countries is rapidly building momentum to tackle climate change and decarbonisation is at the centre of this shift linked to government policy and the improving economics of the underlying technologies.”
This new launch follows another European clean energy first – the arrival of the iClima Distributed Renewable Energy UCITS ETF (DGEN) – at the start of June.