Invesco Unveils New European S&P 500 Climate ETF

Invesco is extending its suite of ESG equity ETFs with the launch of a climate transition benchmark (CTB) S&P 500 strategy, ETF Stream can reveal.

The Invesco S&P 500 CTB Net Zero Pathway ESG UCITS ETF (SCTB) is listed on the London Stock Exchange (LSE), Deutsche Boerse, Euronext Milan, and SIX Swiss Exchange with a total expense ratio of 0.09%.

Derived from the S&P 500, the index first excludes companies involved in tobacco, controversial weapons, oil sands, small arms, military contracting, thermal coal, and those that violate UN Global Compact principles or are not covered by S&P’s ESG data solution.

The methodology then ensures alignment with climate and ESG objectives while maintaining sector and industry weightings similar to the S&P 500.

ETF Objectives Must Meet Minimum EU CTB Standards

Climate and ESG objectives include prohibiting companies that do not align with the minimum standards for the EU's CTB and align with a 1.5°C climate scenario using S&P’s selected Transition Pathway Model.

SCTB is classified as an Article 8 fund under Sustainable Finance Disclosure Regulation (SFDR).

Chris Mellor, head of EMEA equity ETF product management at Invesco, said, “The European Commission established two benchmark frameworks for climate investing: Climate Transition and Paris-Aligned Benchmarks. They share the same end-goal, but one of the few differences is that CTB indices do not have the blanket ban on oil and gas companies that the stricter PAB [indexes] do."

“This allows a CTB index, and in turn our ETF, to follow a more representative pathway to decarbonization, acknowledging that fossil fuels will play an important interim role during the transition to cleaner sources of energy.”

Invesco recently launched the world's first synthetic equal-weight ETF providing exposure to the S&P 500.

This article was originally published on our sister site, etfstream.com.