DWS, one of the largest asset managers in Europe, announced today the launch of two climate-focused ETFs for its exchange-traded funds business Xtrackers, utilizing carbon intensity-weighted Solactive ISS ESG Net Zero Pathway Index Series.
The new Xtrackers EMU Net Zero Pathway Paris Aligned UCITS ETF and the Xtrackers World Net Zero Pathway Paris Aligned UCITS ETF seek to track the Solactive ISS ESG Developed Markets Eurozone Net Zero Pathway Index and the Solactive ISS ESG Developed Markets Net Zero Pathway Index, respectively, offering core exposure to eurozone and developed market equities.
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. DWS also stated that the Series aims to represent multiple segments of the global stock market complying with the regulations of the EU Paris-Aligned Benchmarks (EU PAB) as regards the minimum standards for EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks.
Simon Klein, Head of Passive Sales, DWS, said:
“Our new Xtrackers ETFs are designed to take ESG investing to the next level by being aligned with the Paris Agreement, but also put strict climate metrics in the centre of the overall index construction. We are pleased to work once again with Solactive in developing these carbon reduction indices, we see this benchmark to become a new standard for sustainable investment practices.”
The index series also aims to implement the recommendations of the Net Zero Investment Framework from the IIGCC. The indices re-weight components according to carbon intensity, their commitment to the SBTi and Task Force on Climate-related Financial Disclosures (TCFD) reporting standards, and on measures of “green” revenues.
Timo Pfeiffer, Chief Markets Officer at Solactive, said:
“Solactive’s longstanding innovative strengths in ESG indices root from our commitment to provide our clients with the most seamless and fitting ESG solution as well as from our clients’ dedication to offer innovative opportunities for investors to contribute to a greener planet. The ISS ESG Net Zero Pathway Index Series cocoons this joint effort between DWS and us, and represents a step into the next stage of sustainable investing.”