UBS Asset Management (UBS AM) today launched a suite of exchange traded funds (ETFs) that exceed the minimum standards of the EU Paris-aligned benchmarks. The UBS MSCI Climate Paris Aligned UCITS ETFs aim to support equity investors in reducing their climate risks. The global and regional exposures also seek to benefit from opportunities arising from the shift to a lower-carbon economy while aligning with the Paris Agreement requirements.
The ETFs track the MSCI Climate Paris Aligned Indexes, which create portfolios of companies that meet a set of criteria around climate change risks and opportunities. The index methodology excludes companies involved in controversial weapons, tobacco and thermal coal. Companies deriving revenue from oil and gas-related activities are also excluded.
The MSCI Climate Paris Aligned portfolios follow an optimization-based approach that aims to achieve several objectives, including:
- reduce the Index’s exposure to physical risk arising from extreme weather events by at least 50%;
- increase the weight of companies which are exposed to climate transition opportunities;
- increase the weight of companies with credible carbon reduction targets; and
- align with TCFD recommendations and with a 1.5°C climate scenario.
These ESG objectives and characteristics qualify the group of ETFs as Article 9 products under the European Union’s Sustainable Finance Disclosure Regulation (SFDR).
The UBS MSCI Climate Paris Aligned UCITS ETFs are available in five sub-funds covering a broad set of regional and global exposures. In addition, two further sub-funds with exposure to ACWI and Emerging Markets will follow in the next months. Listings will be across key European exchanges, including Xetra, Borsa Italiana and SIX Swiss Exchange.
“As the world transitions to a lower carbon economy, our goal is to be at the forefront of the transformation, providing the solutions investors need to align their portfolios with their chosen glidepath. We are pleased to further expand our extensive offering of sustainable ETFs with the launch of this new suite of Paris-aligned products that enable clients to proactively address climate risks and also benefit from opportunities arising from decarbonisation.”
Suni Harford, President of UBS Asset Management
“This suite of Paris-aligned ETFs offers investors portfolio building blocks with the added benefit of restricting CO2 emissions to limit the global temperature rise to 1.5°C. This launch demonstrates our strength in providing solutions that meet the highest sustainability standards from emerging regulations.”
Clemens Reuter, Global Head of ETF & Index Fund Client Coverage at UBS Asset Management
“We are proud to expand our ETF offering with products that allow clients to proactively address climate risks and also benefit from the opportunities arising from decarbonisation.”
Nina Petrini, Head of ETFs and Index Funds at UBS AM for Iberia