Change Finance, a majority women-run asset manager, has launched its first ETF – the Change Finance Diversified Impact US Large Cap Fossil Fuel Free ETF (CHGX).
CHGX is the only ETF that uses diversified impact screens to look beyond excluding fossil fuels, taking a comprehensive approach to socially responsible investing. Its methodology is informed by the United Nations Sustainable Development Goals (SDGs). These internationally agreed-upon standards seek to eradicate poverty, protect planetary life support, and achieve lasting peace and dignity for humanity. Change Finance, devoted to providing impact-focused, performance-oriented investments, uses the SDGs to craft investment options for customers who care about impact and income.
“CHGX is a new chapter in investing,” says Donna Morton, Change Finance CEO. “Our investors want alignment with what they care about, without sacrificing performance. Fossil fuel-free is essential, but CHGX then goes further, divesting not only from companies who dig up, refine, burn and service fossil fuels, but also from companies that are serious polluters, that have significant human or labor rights violations, and that fail to meet a variety of other social and environmental standards. No other ETF does this.”
CHGX goes beyond fossil fuel-free screens as well.
“We reject companies that produce pesticides or military weapons, engage in corrupt business practices or have exploitative relationships with labor and Indigenous people,”says Andrew Rodriguez, Change Finance President. “We move money from harm to healing – harnessing our collective experience in social change. The result is an ETF that invests in companies built for the 21st century. This sort of smart investing can solve some of the worst social and environmental issues, and we believe it could serve as a core holding in any investor’s portfolio. Think of us as inspired by the values of ‘Occupy,’ but powered by the acumen of Wall St.”
A growing body of academic research suggests that ESG (Environmental, Social, and Governance) factors can also be predictive of outperformance.
“We see ‘investing to turn a profit’ versus ‘investing with your personal values’ as a false trade-off,” says Dorrit Lowsen, Change Finance COO. “You don’t have to choose between the two. There’s ample evidence that doing good for people and planet is actually just plain good business.”
CHGX’s index begins with the 1,000 largest US-listed companies and applies a series of ESG screens to exclude companies that are deemed to be “bad actors,” whether they operate in the oil, gas, coal, or tobacco industries among others, or have engaged in any sort of business malpractice. The fund has an expense ratio of 0.75 per cent, and intends to spur changes in companies through shareholder advocacy. CHGX will track the performance of the Change Finance Diversified Impact US Large Cap Fossil Fuel Free Index.
“After applying these screens, what you’re left with are good global corporate citizens – large cap, US-based companies representing a range of sectors,” says Hunter Lovins, Change Finance Executive Vice President of Impact, “We believe these are some of the best companies with long-term business models. They are conscientious regarding their impact on employees, supply chains, people, and planet. They do what they can to reduce their carbon footprint, implement inclusive employment practices, harness the wisdom of women, and seek to do good in the communities where they do business. They are what I want to own.”