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KraneShares lists MSCI China Environment ETF on NYSE


Krane Funds Advisors, a US asset management firm known for its China focused KraneShares exchange traded funds (ETFs) and China investment strategies, has launched the KraneShares MSCI China Environment ETF. 

KGRN, which has listed on the New York Stock Exchange (NYSE), holds Chinese companies that derive at least 50 per cent of their revenues from environmentally beneficial products and services.

China has grown to become the second largest economy and second largest stock market in the world by market capitalisation. China’s economic growth has triggered an increase in automobile ownership, construction projects and energy consumption, particularly coal consumption; all currently at their decade highs. China’s rapid economic development has impacted the environment with current levels of air and water pollution higher than those recommended by the World Health Organisation.

In order to address pollution concerns, China has set ambitious goals to expand environmental protections. China is already the world leader in total renewable energy capacity, at 28 per cent of total global capacity, yet they plan to spend an additional USD360 billion on renewable energy by 20202. At the same time China aims to achieve 50 per cent commercial green building certification by 20203. Meeting these standards would create as much new renewable energy capacity as the entire US electricity system4, and half of the world’s green building floor space.

“China is currently undergoing an environmental renaissance, pledging hundreds of billions of dollars to environmental protection projects and policies,” says Jonathan Krane, Chief Executive Officer of KraneShares. “We believe Chinese companies focused on contributing to a more environmentally sustainable economy may potentially benefit from this focused initiative.”  

KGRN seeks to track the MSCI China IMI Environment 10/40 Index. The Index is based on five key Clean Technology environmental themes: Alternative Energy, Sustainable Water, Green Building, Pollution Prevention and Energy Efficiency. Company selection is based on environmental, social and governance (ESG) data from MSCI ESG Research. MSCI is a leading provider of ESG research and indexes according to the 2016 Independent Research in Responsible Investment (IRRI) survey of 1,200 participants conducted by SRI Connect and Extel.

“The MSCI China IMI Environment 10/40 Index highlights MSCI’s commitment to helping global investors implement their responsible investment objectives,” says Christine Berg, CFA, Managing Director at MSCI. “The index incorporates MSCI ESG Research and is comprised of Chinese companies that focus on contributing to a more environmentally sustainable economy.”

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