Invesco has launched two ESG ETFs including the first ETF to track the recently created FTSE All Share ESG Climate index.
The Invesco FTSE All Share ESG Climate UCITS ETF (FASE) and the Invesco MSCI Europe ex UK ESG Universal Screened UCITS ETF (ESEU) are listed on the London Stock Exchange (LSE) with total expense ratios (TERs) of 0.12% and 0.16%, respectively.
Rebalanced quarterly, FASE tracks the FTSE All Share ex Investment Trusts ESG Climate Select index which excludes companies that have faced severe ESG controversies or are involved in controversial business areas.
Using FTSE Russell’s target exposure methodology, FASE targets a 50% reduction in index-level carbon emissions, a 50% reduction in fossil fuel reserves, a 50% increase in green revenues and a 10% improvement in index-level ESG ratings.
Chris Mellor, head of EMEA ETF equity and commodity product management at Invesco, commented: “While excluding the most controversial businesses, we wanted to make sure that we include companies that are capable of improving their ESG profile, reducing their impact on the climate and helping to solve the world’s environmental problems.”
Meanwhile, ESEU tracks the MSCI Europe ex UK ESG Universal Select Business Screens index which currently offers exposure to 324 stocks that score well from an ESG perspective.
This is the sixth strategy in the firm’s range of MSCI Universal ESG ETFs.
Gary Buxton (pictured), head of EMEA ETFs and indexed strategies at Invesco, added: “As demand continues to broaden out, investors need a greater variety of exposures to tailor asset allocation and meet portfolio objectives.
“This year, we have started to see an upturn in demand for strategies with a similar profile to standard indices, but with a methodology that rewards companies’ demonstrating better ESG credentials and particularly regarding their impact on the environment.”
Invesco has been active in the ESG ETF space this year launching no fewer than six strategies, including most recently the Invesco Global Clean Energy UCITS ETF (GCLE) earlier this month, ETF Stream revealed.