Industry Updates

Invesco clean energy ETF to be labelled SFDR Article 9 after index tweaks

Shareholders will vote on changing the ETFs investment objective

Theo Andrew

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Invesco is proposing to label its clean energy Article 9 under the Sustainable Disclosure Financial Regulation (SFDR) after amendments to its index.

In a shareholder notice, Invesco asked shareholders to vote on changing the investment objective of its Invesco Global Clean Energy UCITS ETF (GCLX) necessary to reclassify it from Article 8 to Article 9 under SFDR.

In order to be classified as Article 9 under the regulations, GCLX must have sustainable investment as its objective.

The firm said the change is appropriate due to amendments to its reference index, the Wilderhill New Energy Global Innovation index.

The amendments will see the index add ESG exclusionary criteria including norms-based, controversy and business involvement screening, avoiding companies with poor governance practices or doing significant harm to the environment.

It said: “As a result of the amendments the reference index will comprise ‘sustainable investments’, as defined in SFDR, and by virtue of replicating the index, the fund will make sustainable investments once the non-material changes have come into effect.”

Should the shareholders approve the change in the investment objective, GCLX will be labelled Article 9 from 29 April.

GCLX has not enjoyed the small resurgence experienced by several clean energy ETFs so far this year, returning -2.3% over Q1.

Elsewhere, the Global X Renewable Energy Producers UCITS ETF (RNRG) has returned 10% followed by the HANetf S&P Global Clean Energy Select HANzero UCITS ETF (ZERO) and the iShares Global Clean Energy UCITS ETF (INRG) which have returned 8.8% and 8.6% over the same period, respectively.

This performance is likely owed to a new round of tailwinds offered by Russia’s invasion of Ukraine and subsequent questions over European countries’ reliance on Russian oil and gas.

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