Tabula Investment Management has entered the ESG arena with the launch of Europe’s first investment grade bond climate change ETF.
The Tabula EUR IG Bond Paris-aligned Climate UCITS ETF (TABC) is listed on Deutsche Boerse with an ongoing charges figure (OCF) of 0.25%.
TABC tracks the newly created Solactive ISS Paris Aligned Select Euro Corporate Bond index which follows the European Union’s Paris-aligned benchmark.
Tabula worked with Solactive and ISS ESG to help develop the index which employs a liquidity filter and sector constraints with data used for filtering the bonds provided by ISS ESG.
TABC offers exposure to euro investment grade bonds from issuers with 50% lower greenhouse gas emissions versus the broad market and an annual decarbonisation of at least 7%.
Furthermore, the ESG screening excludes bonds from companies that have violated human and labour rights along with those involved in controversial weapons and tobacco or have caused environmental harm.
Commenting on the launch, Michael John Lytle (pictured), CEO of Tabula, said: “Tackling climate change is arguably the defining issue of our age and addresses a major risk to all investment portfolios.
“Investors need to utilise specialist climate solutions, and there needs to be a major shift of large asset pools into a range of climate impact investments.”
Timo Pfeiffer, chief markets officer at Solactive, added: “Tabula’s innovative approach to passive fixed income has resulted in a liquidity-focused core IG ETF that exceeds the emissions reduction goals of the Paris climate agreement.
“We are happy that we can serve as the index provider for this ETF that helps to make the world a greener place.”
Tabula has also listed the ETF (COOLx) on Cboe in Swedish Krona which has an OCF of 0.30%.
The climate change ETF space is hotting up in Europe with a number of issuers launching strategies last year.
In October 2020, BlackRock unveiled Europe's first government bond climate ETF, iShares € Govt Bond Climate UCITS ETF (SECD).