DWS, one of the largest asset managers in Europe, announced today the launch of a new climate-focused ETF for its exchange-traded funds business Xtrackers, expanding its suite of Paris Agreement-focused product series with a fund providing exposure to emerging markets.
The new fund, Xtrackers Emerging Market Net Zero Pathway Paris Aligned UCITS ETF, is 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, and additional ETFs in September, providing exposure to US, European and Japanese equity markets.
The underlying indices for the ETFs correspond to EU Paris Aligned Benchmark (PAB) regulations. Indices that are labeled as PABs under EU rules must meet criteria for asset selection that results in the index aligning with the long-term climate goals of the Paris Agreement. Criteria include a minimum reduction in greenhouse gas (GHG) emissions intensity of at least 50% compared to the market index, with annual GHG emissions intensity reductions of at least 7%, among others.
Simon Klein, Global Head of Passive Sales at DWS, said:
“With the new ETF, we now offer a full range of products aligned with the Paris Climate Agreement, giving investors suitable solutions for both developed and emerging markets.”
The ETF will track the Solactive ISS ESG Emerging Markets Net Zero Pathway Index, which aims to reflect the performance of large- and mid-cap companies across global emerging markets, selected and weighted to align with PAB standards. The index also reflects the recommendations of the Institutional Investors Group on Climate Change’s Net Zero Investment Framework, which weights components according to factors including carbon intensity, commitment to the Science Based Targets initiative (SBTi), and Task Force on Climate-related Financial Disclosures (TCFD) reporting standards, while also employing additional ESG screens.
Timo Pfeiffer, Chief Markets Officer at Solactive, commented:
“With another ETF tracking our ISS ESG Net Zero Pathway Index Series, investors have options to diversify in various regions keeping their commitment with ESG investing.”