Global asset manager Invesco announced the launch of the Invesco MSCI Global Climate 500 ETF (KLMT), and new exchange traded fund providing exposure to companies meeting environmentalEnvironmental criteria consider how a company performs as a steward of nature. and climate criteria and reducing greenhouse gas emissions.
The new ETF, trading on the NYSE, is being launched with a $1.6 billion investment by Finnish pension insurer, Varma.
Timo Sallinen, Varma’s Head of Listed Securities, said:
“We are very pleased to work alongside Invesco, one the world’s biggest asset managers, and MSCI, a leading global index provider, to create an ETF tailored to Varma’s systematic investment preferences. Our $1.6 billion investment in KLMT will help us meet our principles for responsible investing and gives us more flexibility for investing our €61 billion assets.”
The new ETF seeks to track the MSCI ACWI Select Climate 500 Index. According to MSCI, the index is designed to support investors seeking to reduce their exposure to the greenhouse gas emissions and increase exposure to companies with their emission reduction targets approved by Science Based Targets initiative (SBTi). The index selects constituents from its parent index, the MSCI ACWI ex Select Countries Index, through a process that aims to reduce weighted average greenhouse gas emissions (Scope 1 and 2) intensity relative to enterprise value including cash (EVIC) by 7% and relative to revenue by 10% on an annualized basis, and to increase weight in companies with SBTi-approved emissions reduction targets, in addition to applying other ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. exclusion criteria.
Brian Hartigan, Global Head of ETFs & Indexed Investments at Invesco said:
“The launch of KLMT is clear indication that sophisticated institutions are increasing their usage of ETFs for a variety of functions. We are excited to collaborate with MSCI to address the needs of one such investor and provide Varma with a US ETF that offers the precise strategy needed for their portfolio. Invesco is one of the few global asset managers capable of servicing clients who want customizable, cross-regional ETFs for exacting exposures.”
MSCI and Varma designed the index to ensure it captures constituents with one or more greenhouse gas emissions reduction targets that fit into Varma’s precise investment parameters with respect to energy transition.
Christine Berg, Head of Client Coverage, Americas at MSCI said:
“We are excited that Varma and Invesco have chosen the MSCI ACWI Select Climate 500 Index as the benchmark for the new Invesco MSCI Global Climate 500 ETF. This is a great example of how custom indexes can be used to support the unique views of large institutional investors.”