UBS Asset Management has launched its first ETF linked to the European Union’s climate benchmarks.
The UBS Climate Aware Global Developed Equity UCITS ETF (CLIMA) is listed on the Deutsche Boerse, Borsa Italiana and SIX Swiss Exchange with a total expense ratio (TER) of 0.19%.
CLIMA tracks the Solactive UBS Climate Aware Global Developed Equity CTB index which looks to align itself with the EU’s Climate Transition Benchmark (CTB).
As a result, CLIMA looks to reduce carbon intensity versus the parent universe by 30% and greenhouse gas (GHG) emissions by 7% a year.
The index incorporates UBS AM’s climate aware framework which includes companies with best-in-class climate scores while excluding companies not involved in the migration to more climate-aware business activities.
This includes companies involved in tobacco, controversial and military weapons, firms with United Nations Global Compact violations, and businesses exposed to production and energy generation of thermal coal and oil sands.
The index also factors in metrics such as a company’s carbon emissions, renewable energy generation capacity, share of revenues resulting from coal mining and generation of energy from coal.
CLIMA also has a 1.8°C degrees portfolio, below the 2°C degree threshold of the Paris agreement.
Barry Gill, head of investments at UBS Asset Management, commented: “Investors are growing more aware of the effects climate is having on their portfolios.
“By providing products, such as CLIMA, we can enable clients to align their investments with their decarbonization goals.
“Our climate aware approach is underpinned by our active stewardship program. With a consistent methodology, and growing the pool of assets invested using this framework, we can drive further positive change on behalf of our clients.”
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The CTB along with the Paris-aligned Benchmark (PAB) was first introduced by the EU in November 2019. The benchmarks look to help investors redirect capital towards portfolios on a decarbonization trajectory.