UBS Asset Management has teamed-up with index provider STOXX and Sustainalytics to launch the world’s first environmental, social and governance (ESG) Euro Stoxx 50 ETF.
The UBS ETF EURO STOXX 50 ESG UCITS ETF (E50ESG) will list on the London Stock Exchange on 13 August with a total expense ratio (TER) of 0.15%.
The move follows UBS AM’s decision to work with S&P Dow Jones Indices in bringing to market the first S&P 500 ESG ETF (5ESG), which ETF Stream revealed in April.
Tracking the Euro Stoxx 50 ESG index, E50ESG will exclude 10% of the least sustainable companies based on ESG scores.
This screen is based on the United Nations Global Compact principles of human and labour rights, the environment, business ethics and anti-corruption.
Furthermore, it applies a product-based screening for controversial weapons, tobacco, thermal coal extraction and coal-powered energy production.
Every excluded company is replaced by the largest non-controversial company in the same ICB sector with a higher ESG score.
ESG data provider Sustainalytics is used for the ESG scores, norm-based and product-based screening.
Clemens Reuter, head of ETF and passive investment specialists at UBS AM, commented: "The demand for sustainable investments is accelerating, and the Euro Stoxx 50 ESG helps us expand into new markets and segments, widening ESG investment opportunities."
Willem Keogh, head of ESG, thematic and factor solutions at STOXX, added: “The ESG-version of our iconic blue-chip index Euro Stoxx 50 is another innovative addition to our comprehensive ESG and sustainability suite.
“The new index is suitable for mandates for pension funds, insurance companies, ETFs, passive funds, and structured products.”
The firm has also launched two further ESG ETFs, the UBS ETF MSCI China ESG Universal UCITS ETF (CNSG) and the UBS ETF JP Morgan USD EM IG ESG Diversified Bond UCITS ETF (EMIG).
With a TER of 0.65%, EMIG tracks the performance of the MSCI China ESG Universal 5% Issuer Capped index meaning each security has a maximum weight of 5%.
CNSG offers investors exposure to investment-grade fixed and floating rate bonds from carbonisation countries and has a TER of 0.45%.