ETFs have long empowered investors looking to express their targeted views on the market and, when it comes to incorporating Environmental, Social and Governance (ESG) considerations, the situation is no different. Through thoughtful innovation Invesco have designed a range of ESG ETFs allowing investors to express their sustainable views across a breadth of regions, sectors, and asset classes.
Whether your clients simply want to avoid certain companies or industries, or help drive positive change, our wide range of ESG ETFs can help build portfolios reflecting values that matter to you and them.
ETFs that aim to provide a meaningful improvement in ESG scores by selecting companies, or adjusting their weighting, based on their ESG metrics while aiming for similar risk and return profiles to standard benchmarks.
ETFs that provide ESG aligned with the objectives of the Paris Agreement, by reducing the weight of companies exposed to climate transition risks and maximising weighting in those with the highest exposure to climate transition opportunities.
ETFs that provide targeted exposure of an ESG-related theme, such as clean energy or more specific segments like solar, wind or hydrogen technologies. These ETFs track indices constructed by specialist firms with expertise in these areas.
Any investment decision should take into account all the characteristics of the funds as described in the legal documents. For sustainability related aspects, please refer to https:// An investment in these ETFs is an acquisition of units in a passively managed, index tracking fund rather than in the underlying assets owned by the ETFs
Investment risks - please click here to view all ETF specific risks. For complete information on risks, refer to the legal documents. The value of investments, and any income from them, will fluctuate. This may partly be the result of changes in exchange rates. Investors may not get back the full amount invested.
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Most investors choose ESG ETFs for the same reasons they choose any other ETF: simplicity, low costs, transparency, tradability and often for the efficient way it tracks a reference index. With each Invesco ESG ETF designed to meet specific objectives, you have complete clarity on the goals and precisely how it will deliver that outcome.
This has been an area of increased focus, with some studies suggesting a positive relationship between a company''s financial and ESG performances. Moreover, some ESG indices have recently outperformed their parent (non-ESG) indices, which is partly due to the sector biases that occur naturally from exclusions, e.g. reduced weighting in energy, but could also be attributed to investors'' placing a "premium" on companies that are successfully managing ESG risks.
Whether or not ESG on its own can drive performance, investors can now find ETFs that have both ESG and financial objectives. You can choose between ESG ETFs that aim for similar returns as the parent index (with meaningful ESG improvement) or that have a greater tolerance for tracking error (with much more ESG improvement).
With environment one of the three ESG pillars, most ESG ETFs will include climate considerations either implicitly or explicitly in the index methodology. Some of our Invesco ESG ETFs go a step further by having specific climate-related goals, such as the Paris-aligned benchmark, reducing overall carbon intensity and/or increasing the amount of green revenues in the portfolio. We also offer thematic ETFs for focused exposure to climate solutions such as clean energy and solar power.
We''ve been helping investors incorporate their ESG objectives for the past 35 years and aim to include ESG considerations across all our investment strategies where possible. We believe engagement is one of the most effective mechanisms to reduce risks, maximise returns and have a positive impact on society and the environment. We are also committed to being a good corporate citizen and are signatories to key industry initiatives especially in the fight against climate change.
As ESG continues to grow globally, different regions have made efforts to introduce regulatory standards. Regulation will be a key factor in ensuring that efforts to integrate ESG have a tangible impact. It''ll also help to drive the standardisation of measuring and reporting.
The EU has introduced green taxonomy, Sustainable Finance Disclosure Regulation (SFDR) and most recently, the Sustainable Finance Strategy to provide rules and structure to the way businesses report on their ESG activities.
Greenwashing is when companies portray a public image of sustainability but aren''t taking sufficient or tangible action behind the scenes or undertake other questionable business activities. It could be a global drinks company committing to using 100% recycled plastic but setting no actual target, or a fast fashion brand using sustainable materials but with questionable manufacturing processes.
In the investment industry, it could be excluding obvious companies like tobacco manufacturers from a portfolio but not applying ESG analysis to the rest of it. Greater regulation and efforts to standardise measuring and reporting should help reduce the effects of greenwashing, as well as wider education.
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