DWS, one of the largest asset managers in Europe, announced the launch of three new climate-focused ETFs for its exchange-traded funds business Xtrackers, expanding its suite of Paris Agreement-focused product series with funds providing exposure to US, European and Japanese equity markets.
The new ETFs are the latest from DWS to track the Solactive ISS ESG Net Zero Pathway Index Series, followed by the launch of the first funds in the suite in March, focused on eurozone and developed market equities.
Each of the new ETFs – the Xtrackers USA Net Zero Pathway Paris Aligned UCITS ETF 1C, Xtrackers Europe Net Zero Pathway Paris Aligned UCITS ETF 1C and Xtrackers Japan Net Zero Pathway Paris Aligned UCITS ETF 1C – qualify as Article 9 under the EU’s SFDR regulation, and aim to reduce emissions in line with the objectives of the Paris Climate Agreement.
The underlying indices for the ETFs correspond to to EU Paris Aligned Benchmark (PAB) regulations. The indices provide a 50% reduction in carbon intensity versus an equivalent non-ESG market benchmark and a 7% year-on-year ongoing decarbonization pathway.
Simon Klein, Global Head of Passive Sales at DWS, said:
“We see impact investing as one of the major future tasks for asset managers. With the new ETFs, we are expanding our range of climate agreement-oriented ETFs to include important investment regions with a view to performance potential and diversification.”
In addition to the Paris Agreement alignment requirements, index provider Solactive noted that the indices also take into account recommendations of the Institutional Investors Group on Climate Change’s (IIGCC) Net Zero Investment Framework Implementation Guide, weighting index members according to carbon intensity, as well as by their commitment to the Science Based Targets initiative (SBTi) and TCFD reporting standards.
Timo Pfeiffer, Chief Markets Officer at Solactive, said:
“The new products tracking the ISS ESG Net Zero Pathway Index Series show our longstanding innovative strengths in ESG indices and cocoons the joint effort between DWS and Solactive to go towards the next stage of sustainable investing, with the full net zero index range.”