Environmental impact fintech, iClima Earth, is set to launch the world’s first ESG UCITS exchange traded fund (ETF), the iClima Distributed Renewable Energy UCITS ETF, that provides exposure to companies promoting the decentralisation of energy generation.
Distributed renewable generation is the ecosystem that allows green energy to be created and managed close to the point of use, for example at home. The DGEN renewable energy ETF will be launched on the HANetf platform and is expected to list on London Stock Exchange in June 2021.
Distributed Renewable Energy involves converging decarbonising technologies and includes residential solar panels, energy storage, smart meters, vehicle-to-grid energy (V2G), electric vehicle charging, smart inverters, and software solutions that leverage Artificial Intelligence (AI) to manage the system. Coupled with energy storage solutions, they can bring a variety of benefits to the system: frequency control, demand response, mitigate the overload of dated transmission lines, support continuous balancing of the electricity supply, and increase the overall reliability.
iClima says the rise of distributed energy away from an ageing and increasingly obsolete centralised grid model based on large fossil fuel installation has been prompted by the decentralisation of the power sector, combined with the digitalisation of grid controls and energy efficiency, and the decarbonisation of our energy mix.
It also says the electrification of transportation and heating will increase the need to add more renewable based solutions to the system. In the USA, making use of two-thirds of suitable rooftops for solar photovoltaic to generate electricity could replace the country’s annual electricity generation from coal, which represented 23 per cent of all sources of US electricity generation in 2019.
It is predicted that as much as USD846 billion will be invested in Distributed (renewable) Energy Sources between 2020 and 2030.
The iClima Distributed Renewable Energy UCITS ETF, which has a TER of 0.69 per cent, will track the iClima Distributed Renewable Energy Index TR, which provides exposure to 50 companies in seven segments directly related to the growing Distributed Generation (DER) business model. Over the past 12 months, the Index has grown by 144.43 per centand 322 per cent since inception in 2017. Past performance is no guarantee of future performance. When you trade ETFs your capital is at risk.
The launch of DGEN, follows the launch of iClima’s first ETF, iClima Global Decarbonisation Enablers UCITS ETF – CLMA. CLMA is the world’s first climate change UCITS ETF that provides exposure to the performance of companies offering products and services that enable CO2e avoidance. CLMA is unique because it shifts the focus from companies’emission reduction actions to companies offering products and services that directly enable CO2e avoidance solutions and shines a spotlight on climate change innovators.
Gabriela Herculano, CEO of iClima Earth said founder of the iClima Distributed Renewable Energy UCITS ETF, says: “Our aim is to redefine climate change investments by shifting the focus from companies’ emission reduction actions, to organisations offering products and services that enable CO2e avoidance solutions. These “climate champions” are companies delivering impactful solutions measured by potential avoided emissions of their products.
“Our new decentralised renewable energy ETF, DGEN, offers investors the opportunity to do this by investing in companies at the forefront of the huge and rapidly growing distributed generation renewable energy market. It shines a spotlight on the relevant companies enabling electricity generation and storage using renewable energy sources in a local, decentralised, and modular way. Flexible technologies in distributed renewable generation collect energy from many sources, lowering environmental impact and increasing security of supply.”
Hector McNeil, Co-CEO of HANetf said “iClima has a unique and exciting, positive approach to investing in companies that are at the forefront of fighting climate change, and we are delighted that they are working with us to develop their ETFs. iClima is well positioned to capitalise on the growing focus from investors on ESG.
iClima Distributed Renewable Energy UCITS ETF (DGEN) is yet another added value and unique HANetf is adding to its burgeoning thematic ETF portfolio. HANetf innovative platform allows asset managers to launch new ETFs in record time and offer end investors the themes they are looking for. DGEN is clearly a great way for investors to invest in these rapidly growing ESG sector and a great addition to HANetf’s thematic ESG range.”
