Krane Funds Advisors announced the launch of a new ETF that will offer investors with exposure to carbon cap and trade programs. The KFA Global Carbon ETF (KRBN) will be benchmarked to the IHS Markit’s Global Carbon Index, which in turn tracks the most traded carbon credit futures contracts. The index currently covers the major European and North American cap-and-trade programs: European Union Allowances (EUA), California Carbon Allowances (CCA), and the Regional Greenhouse Gas Initiative (RGGI). The new ETF will be available on the New York Stock Exchange (NYSE).
Krane Funds Advisors is the investment manager for KFA Funds and KraneShares ETFs. The firm has recently launched a series of ESG-themed products, including the launch of a new China focused ESG-themed ETF, the KraneShares MSCI China ESG Leaders ETF (KESG), on the NYSE last week.
Jonathan Krane, CEO of Krane Funds Advisors, said:
“This is a historic fund for global ESG investors. As of today, KRBN is the first US-listed ETF to combine the largest carbon allowance markets into a single investable fund. KRBN can support positive climate action by allowing investors to go long the price of carbon emissions.”
Former Secretary of State, John Kerry, Chairman of the Climate Finance Partners Advisory Board (CLIFI), which is the sub-advisor to KRBN, said:
“The climate crisis threatens life itself. Just as COVID-19 demanded an early response, so do the threats of climate disaster. One of the most powerful ways the world can collaborate to reduce emissions is to move toward carbon pricing that puts basic, free-market economics to work.”
Robert Engle, Nobel Prize-winning Economist and member of CLIFI’s Advisory Board, said:
“A comprehensive global price for carbon emissions at a substantial level could encourage rapid shifts of resources to lower carbon technologies and incentivize research and development of carbon capture and clean energy. KRBN provides investors access to the carbon allowances futures market, which is vital to having the free market determine the price of CO2 pollution.”
Eron Bloomgarden, Founder of CLIFI, added:
“Following COVID-19, the climate crisis is perhaps the single largest long-term challenge facing the global community. Addressing climate change through carbon emissions pricing presents an enormous opportunity to rebuild a greener, safer, and more resilient economy.”
Sophia Dancygier, SVP and Global Head of Indices at IHS Markit, said:
“Across the world, there is a growing demand for investment solutions that facilitate the principles of environmental sustainability, while supporting economic development We are proud to collaborate with Krane Funds Advisors and CLIFI on the launch of this innovative ETF tracking our Global Carbon Index.”