State Street Global Advisors (SSGA) has launched an S&P 500 ETF with an environmental, social and governance (ESG) tilt.
The SPDR S&P 500 ESG Screened UCITS ETF (500X) is set to list on Xetra, Euronext Amsterdam, Borsa Italiana and SIX Swiss Exchange with a total expense ratio (TER) 0.10%.
Tracking the S&P 500 ESG Exclusions II index, 500X will exclude companies based on data from Sustainalytics.
This includes industries such as controversial weapons, civilian firearms, tobacco and thermal coal as well as companies that do not comply with the Ten Principles of the UN Global Compact.
Some 36 stocks in the parent S&P 500 are currently excluded by the screening process.
Furthermore, if a company violates ESG data science company RepRisk’s index threshold of 70, it will be removed from the index within two business days.
ETF Insight: Are ETF and index providers taking ESG seriously?
Rebecca Chesworth (pictured), senior ETF strategist, SPDR, at SSGA, commented: “There is strong demand for an ETF linked to this index with ESG overlay.
“The screens are based on the responsible policies of leading asset owners and aim to reduce reputational and idiosyncratic risks.”
Mandy Chiu, head of ETF product for EMEA and APAC at SSGA, added: “It is clear investors are increasingly focused on seeing ESG concerns addressed in their portfolios and want to take advantage of the many benefits offered by ETFs to do this.”
SSGA is the second issuer in Europe to offer investors the S&P 500 with an ESG tilt. In April, UBS Asset Management teamed-up with S&P Dow Jones Indices to launch the world's first S&P 500 ESG ETF (5ESG).