Deutsche Bank’s investment arm DWS, one of the largest asset managers in Europe, announced today the launch of a new fund aimed at providing investors with exposure to U.S. equities aligned with the global climate goal to transform economies to net zero by 2050.
The new fund, Xtrackers Net Zero Pathway Paris Aligned U.S. Equity ETF (USNZ), tracks the Solactive ISS ESG United States Net Zero Pathway Enhanced Index, developed by index provider Solactive, with engagement by DWS. The index is a Paris Aligned Benchmark (PAB), which consists of 386 U.S. large and mid-cap stocks.
Indices that are labeled as PABs 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.
Amanda Rebello, Head of Passive Sales at DWS, U.S. Onshore, said:
“Our clients are keen to play a positive role in helping society reach net zero, and we are confident that this new ETF, with its rigorous index methodology run by Solactive, can help seek to meet that need.”
In addition to PAB requirements, the index also aims to comply with recommendations published by the Institutional Investors Group on Climate Change, and with its Net Zero Investment Framework.
Arne Noack, Head of Systematic Investment Solutions, Americas, at DWS, said:
“There is a clear need for investments that align with net zero aims. USNZ provides a powerful net zero investment strategy that meets the latest regulatory standards that govern Paris aligned benchmark indices as defined above. DWS has a long history of providing ETF investors with specialist investment opportunities that combine the efficiency of passive investing with the advantages of well thought out, rules-based strategies for particular needs.”
USNZ is listed on the New York Stock Exchange.