DWS Launches 3 Biodiversity ETFs in Europe

DWS Launches 3 Biodiversity ETFs in Europe

The funds cover global, U.S. and European equities.

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Reviewed by: etf.com Staff
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Edited by: Mark Nacinovich

German asset manager DWS has launched three biodiversity ETFs covering global, Europe and U.S. equities, according to ETF Stream.

The Xtrackers World Biodiversity Focus SRI UCITS ETF (XBIO), the Xtrackers Europe Biodiversity Focus SRI UCITS ETF (XBEE) and the Xtrackers USA Biodiversity Focus SRI UCITS ETF (XBUZ) were listed on the Deutsch Boerse on Friday and will be listed on the London Stock Exchange next week.

The three funds have a total expense ratios of 0.30%.

They will track the relevant regional ISS Stoxx Biodiversity Focus SRI indexes which have a “multi-stage filter”.

First, companies with activities—producers of palm oil or pesticides—that are “demonstrably detrimental” to biodiversity are excluded from the investment universe.

The remaining businesses with the “strongest negative impact” on biodiversity within an economic sector are also excluded, according to the ISS ESG Biodiversity Impact Assessment Tool.

In addition, biodiversity and climate-related United Nations Social Development Goals are included in the selection process.

Carbon Filter

A filter will also be applied to reduce the carbon intensity of the portfolio by at least 50% compared with the broad market index.

“With these ETFs, investors can transparently reduce the risks associated with the decline in biodiversity for their broadly diversified equity investments,” Olivier Souliac, head of indexing Xtrackers products at DWS, said.

“This is an important addition to our range of sustainability-oriented investments," he added.

The launch comes as the investment world increasingly turns its focus toward biodiversity as both an ecological and economical issue.

Index providers have been rushing to develop indexes that can accurately capture the theme, but many still believe the data is in its early stages.

The World Economic Forum predicts the loss of biodiversity will have the third-largest negative impact on humanity over the next decade, behind climate change and extreme weather.

DWS follows several other issuers that have launched biodiversity exchange-traded funds over the past year, including HSBC Asset ManagementBNP Paribas Asset Management and AXA Investment Managers.

Earlier this week, DWS launched the Xtrackers MSCI Emerging Markets Climate Transition UCITS ETF (XEMC), “completing” its CTP range.

Theo Andrew joined ETF Stream as a senior reporter in September 2021. He has over four years of investment writing experience spanning pensions and retail investments, most recently at Citywire, where he was a senior reporter covering environmental, social and governance investing.