DWS has launched a new Xtrackers ETF based on emerging equity markets, with a focus on ESG characteristics and also aligned with the goals of the 2015 Paris Climate Agreement.
Including the new ETF, DWS has already launched six equity ETFs based on the same index methodology, providing exposure to the following equity markets: Global, USA, Europe, Eurozone, Japan and now also Emerging Markets. Additionally, in November 2022, DWS introduced four Xtrackers ETFs that track the corporate bond market in Euros and US dollars with different maturities and whose tracked indices are also aligned with the goals of the Paris Climate Agreement.
The Xtrackers Emerging Markets Net Zero Pathway Paris Aligned UCITS ETF is listed on Deutsche Boerse and the London Stock Exchange, with other exchanges to follow. The ETF aims to reduce emissions in line with the objectives of the Paris Climate Agreement, with the underlying index therefore corresponding to EU Paris Aligned Benchmark (PAB) regulations. Specifically, the ETF tracks the Solactive ISS ESG Emerging Markets Net Zero Pathway Index, which aims to achieve a 50 per cent reduction in carbon intensity compared to an equivalent non-ESG market index, in line with the goals of the Paris Climate Agreement, as well as a continuous reduction in carbon intensity of seven per cent per year.
“With the new ETF, we now offer a full range of products aligned with the Paris Climate Agreement – giving investors suitable solutions for both developed and emerging markets,” says Simon Klein, Global Head of Passive Sales at DWS.
All Xtrackers equity ETFs in the Net Zero Pathway series are characterised by the fact that they are oriented towards the Paris Climate Agreement, DWS writes. They also take into account recommendations of the Institutional Investors Group on Climate Change (IIGCC), as defined in the corresponding “Net Zero Investment Framework Implementation Guide”, the firm says. This means that the indices do not weight the included index members solely on the basis of their carbon intensity, in accordance with the recommendations of the IIGCC.
An overweighting of companies in the indices is based on the extent to which they adopt science-based targets, as defined by the initiative of the same name. Also relevant for the index weighting are the standards for climate reporting as defined by the Task Force on Climate-related Financial Disclosures (TCFD) and efforts to mitigate climate change, the firm says.