Invesco announced today the release of its new Climate Paris Aligned environmental, social and governance (ESG) range of passive funds.
The set of four exchange-traded funds (ETFs) will share the same goals as the Paris Climate Agreement, signed by world leaders in 2016.
Each fund will track indices that invest primarily in carbon conscious companies with specific exposure to clean energy related assets.
Gary Buxton, head of EMEA ETFs and Indexed Strategies at Invesco, said: “Each index applies a broad set of exclusions, with the remaining constituents optimised to reduce carbon intensity to a level consistent with a 1.5°C warming pathway.
The four funds will cover the USA, Europe, Japan, and global equity markets with the potential for an emerging markets portfolio to be added later.
Charges range from 0.09% for the USA fund to 0.19% for the World and Japan trackers.
The addition of the Climate Paris Aligned range now brings Invesco’s total number of ESG products available to 21. The firm manages a total of $1.6bn (£1.2bn) in assets overall.
Invesco launched another ESG range, the Summit Responsible funds in January this year with its highest performing portfolio making returns of 17.8% so far.
ESG funds received a record inflow of £1.5bn in November whereas those without ESG mandates made loses of £1bn for the second month running, indicating a growing shift in investor behaviour towards sustainable assets.
Buxton added: “As world leaders initiate plans to slow global warming, companies are key to success. This new range of ETFs offer investors an efficient way to focus on companies with lower climate-related risks and positive exposure to the transition, while meeting broader ESG objectives.”
Vanguard is also riding the wave of ESG popularity, releasing its new SustainableLife range yesterday. The four actively managed funds have a higher charge of 0.48% and invest solely in environmentally sustainable assets.