Impact fintech issuer iClima is set to launch the world’s first distributed renewable energy ETF.
The iClima Distributed Energy UCITS ETF (DGEN) will list on the London Stock Exchange later this month through white-label ETF issuer HANetf with a total expense ratio (TER) of 0.69%.
DGEN will track the iClima Distributed Renewable Energy index which offers exposure to 50 companies across seven segments directly related to growing the distributed generation business model.
In a clean energy context, the distributed model covers industries enabling the production and management of renewable power close to the end user, for instance in a domestic capacity.
The technologies underpinning this include residential solar panels, energy storage, smart meters, vehicle-to-grid energy, electric vehicle charging, smart inverters and AI-powered software solutions.
iClima said it expects increased roll-out of the technologies targeted by DGEN, as societies shift towards a more decentralised and digitised power sector, which it anticipates will also include electrification of transportation and heating.
This could lead to as much as $846bn invested in distributed energy sources between 2020 and 2030, the firm said.
Commenting on the launch, Gabriela Herculano, CEO of iClima Earth, who is speaking at ETF Stream’s ESG ETFs webinar on 23 June said: “Our aim is to redefine climate change investments by shifting the focus from companies’ emission reduction actions, to organisations offering products and services that enable CO2e avoidance solutions.
“[DGEN] shines a spotlight on the relevant companies enabling electricity generation and storage using renewable energy sources in a local, decentralised, and modular way.
“Flexible technologies in distributed renewable generation collect energy from many sources, lowering environmental impact and increasing security of supply.”
The arrival of DGEN follows a string of launches by HANetf in recent weeks, including Europe’s first travel and space ETFs – the Airlines, Hotels and Cruise Lines UCITS ETF (TRYP) and Procure Space UCITS ETF (YODA) – last week.