Beyond Advisors has filed a registration statement with the US Securities and Exchange Commission for the proposed launch of the US Vegan Climate ETF. It is anticipated to list with ticker VEGN on the New York Stock Exchange in January 2019.
The US Vegan Climate ETF will be managed to track the US Vegan Climate Index, which was launched by Beyond Advisors in June 2018. Since then it has been independently calculated and published in real-time by Solactive AG with index prices published in real-time by the Stuttgart Stock Exchange, and on Bloomberg and Reuters terminals under the ticker VEGAN as well as reported daily on the Solactive website.
The US Vegan Climate Index is a passive, rules-based index of US large cap stocks, screened according to vegan and climate-conscious principles.
Beyond Advisors is screening the Solactive US Large Cap Index, made up of the largest approximately 500 stocks in the US market, to exclude stocks of companies whose business activities include the following:
• Animal testing
• Animal-derived products, animal farming, and other exploitation activities
• Animals in sport and entertainment
• Research, development, and use of genetically engineered animals
• Extraction or refining, or services principally related to the extraction or refining, of fossil fuels
• Burning of fossil fuels for energy production
• Other activities having a significant negative environmental impact (e.g., high carbon intensity activities, high climate change impact, habitat destruction), unless the applicable company undertakes positive initiatives that effectively address those impacts
• Tobacco products
• Armaments and products specifically designed for military and defence uses
• Contributions to the abuse of human rights or lack of robust, detailed, and independently published policies covering human rights and child/forced labour.
The construction methodology proactively replaces exposures to those industry groups where exposures are greatly diminished with stocks in the same industry group in the mid-capitalisation band provided they are not engaging in these prohibited activities. This enables the Index to gain exposure to smaller companies delivering similar products and services but without harming animals, people or the planet.
“The depth and breadth of the ethical research involves a deep dive into a company’s activities, subsidiaries and products to arrive at a Pass, Fail and, where appropriate, to identify as a candidate for ongoing engagement,” says Lee Coates, Head of Ethical Screening. “This level of scrutiny has not, as far as we are aware, ever been as deeply embedded in the investment philosophy of a financial product”.
The UN Intergovernmental Panel on Climate Change (IPCC) report published 8 October 2018 encouraged rapid, far-reaching and unprecedented changes in all aspects of society to maintain temperature rise below 1.5c, with actions to reduce greenhouse gas emissions including a reduction in the use of fossil fuels and protection of forests at risk from the demands of animal production. Livestock was already found in the study published by the WorldWatch Instituteto be responsible for 51 per cent of greenhouse gas emissions.
By being both zero animal exploitation and zero fossil fuel the US Vegan Climate Index has a carbon footprint well below the Solactive US Large Cap Index as well as reporting significantly lower waste generation and fresh water utilisation (as calculated by Impact-Cubed).
The US Vegan Climate ETF is expected to be available for investment in January 2019 with estimated expense ratios of 0.60 per cent.
