Impact Shares launches Global Climate Select ETF
Impact Shares, the non-profit ETF sponsor backed by The Rockefeller Foundation, has launched the Impact Shares MSCI Global Climate Select ETF (NYSE Arca: NTZO) in collaboration with the United Nations Capital Development Fund (UNCDF), the UN agency that makes public and private finance work for the poor in the world’s 46 Least Developed Countries (LDCs).
NTZO is based on an index licensed by MSCI (NYSE: MSCI), a provider of critical decision support tools and services for the global investment community.
The new ETF, based on the MSCI ACWI Climate Pathway Select Index, was co-created by Impact Shares and a working group of the Global Investors for Sustainable Development (GISD) Alliance. In 2019, UN Secretary General António Guterres established the GISD, a group of 30 of the world’s top business leaders, to arrive at solutions that scale up private finance and investment necessary to achieve the UN Sustainable Development Goals (SDGs).
“The GISD Alliance was convened to help move money behind the SDGs,” says Investec CEO Fani Titi, a GISD member. “With this climate ETF aimed at tackling SDG 13, we have created a real opportunity for investors to finance greater good. It is exciting to see our work with the United Nations and other partners to develop standards and tools to mobilise investment in sustainable development paying off in this investment product.”
The NTZO ETF includes UN values in its methodology: companies in the index must abide by the UN Global Compact, and entities that profit from weapons, guns, alcohol, tobacco, or palm oil are excluded. Recognizing the urgency of moving to a Net Zero economy during the UN Conference of Parties (COP) meeting and beyond, the index also excludes companies that own or profit from any form of fossil fuel.
“The need to address climate change impacts has never been clearer, especially for the world’s poorest and most vulnerable countries,” says Preeti Sinha, Executive Secretary of UNCDF. “We at UNCDF are very proud to support the GISD by issuing our second ETF with Impact Shares [after the 2018 launch of SDGA, which includes companies that create positive economic benefits in the Least Developed Countries (LDCs)]. NTZO demonstrates UNCDF’s ability to create innovative financial products that appeal to investors and continue to raise impact standards. And the fee donation will help the UN build climate resilience in the world’s LDCs.”
Stuart Doole, Managing Director, Research at MSCI, comments: “We are pleased to work with Impact Shares as the index provider for this launch. The MSCI ACWI Climate Pathway Select Index was constructed through an approach that targets companies with climate transition opportunities, minimises climate transition risks, reduces carbon emitters using Scope 1, 2 and 3 emissions criteria, and includes companies with carbon reduction targets following an annualized 7 per cent year-on-year decarbonisation trajectory. The index also targets an improved ESG profile as compared to its parent market capitalisation weighted index, the MSCI ACWI Index.”
Impact Shares, a nonprofit fund manager, will donate the net management fee on NTZO to UNCDF to build climate resilience and adaptation in the LDCs. This fee donation gives the investing public an innovative new way to support the work of the United Nations.
"Extreme weather events and intensifying climate volatility are a stark reminder of the urgency of accelerating the carbon transition," says Ethan Powell, CEO of Impact Shares. "Broad collaboration among key organisations such as the UNCDF and GISD are crucial in moving investors to decarbonize their portfolios and support the transition to a more sustainable economy."
The launch of NTZO was announced November 3 in Glasgow at the UN Climate Change Conference (COP26) and began trading on the New York Stock Exchange the same day.