DWS writes that the United Nations’ 2030 Agenda formulates a total of 17 Sustainable Development Goals (SDGs) to address key global challenges. Examples include food and water supply, health and climate protection. To achieve these goals, DWS writes that an estimated five trillion to seven trillion US dollars will be needed annually by 2030. Investment funds play a major role in directing capital to companies that specifically support the formulated goals.
DWS writes that it is now the first asset manager to offer the opportunity to invest via ETFs in companies that can contribute to the achievement of specific SDGs. Six Xtrackers MSCI Global SDG UCITS ETFs are each aligned with one of these goals. Index members are selected based on their relevance with respect to these goals. They are thus thematic ETFs that track broad social and economic trends. The SDG themes are supported by a wide range of institutions, states and companies.
The Xtrackers MSCI Global SDGs UCITS ETFs are aligned with six different goals: “Sustainable Production and Consumption” (SDG 12), “Sustainable Cities and Communities” (SDG 11), “Industry, Innovation and Infrastructure” (SDG 9), “Affordable and Clean Energy” (SDG 7), “Clean Water and Sanitation” (SDG 6), “Health and Wellbeing” (SDG 3). The Xtrackers MSCI Global SDGs UCITS ETF tracks a combination of all SDGs to which companies can measurably contribute through their activities. Three ETFs are already listed on Deutsche Börse, the London Stock Exchange and the Swiss Stock Exchange. The four other ETFs are expected to be listed in the coming weeks, the firm writes.
Specifically, the ETFs invest in small, mid and large cap companies from 23 developed and 24 emerging markets. The starting point is the MSCI ACWI Investable Market Index. To identify relevant companies for each goal, various related themes were defined for each sustainability goal. For SDG 11 (“Sustainable Cities and Communities”), for example, these are pollution prevention, smart infrastructure and buildings, or zero-emission vehicles, DWS writes. Only companies whose sales specifically support at least 50 per cent of the respective goal are selected for the index.
DWS writes that it is important to note that companies whose operations conflict with any of the 17 sustainability goals are excluded. In addition, the selection of index members of the Xtrackers MSCI Global SDG UCITS ETFs filters out companies that exceed revenue thresholds in activities related to, for example, coal, tobacco and conventional weapons (so-called MSCI ESG Screened Index methodology), as well as companies that would violate one SDG even if they contributed to another.
“With our Xtrackers MSCI Global SDG UCITS ETFs we have become the first asset manager to make the United Nations Sustainable Development Goals investable via a rules-based strategy. The goals mapped represent social and economic trends that are broadly supported and can therefore represent an attractive investment target”, says Simon Klein, Global Head of Xtrackers Sales at DWS.