Invest in these ESG funds as the race to fight global warming heats up
Ait is the purpose of keep the global temperature below 1.5°C becomes increasingly out of reach, members of the Paris Agreement set up a commission to deal with the disastrous effects of a global temperature exceeding 1.5°C or even 2°C.
Scheduled to launch this month, the Climate Overshoot Commission will be made up of 15 former ministers, presidents and representatives of international organizations and will explore options for deep adaptation, carbon dioxide removal (CDR) and geo -engineering. The commission will address questions of ethics and feasibility of how to potentially reverse global warming that are problematic or unproven on a large scale. Pascal Lamy, former Director General of the World Trade Organization and President of the Paris Peace Forum will chair the new commission.
“The main strategy to combat climate change should remain the reduction of greenhouse gas emissions, but it has also become necessary to explore additional strategies,” said Jesse Reynolds, executive secretary of the commission. Climate Home News.
For investors looking to make their portfolios more environmentally and socially responsible, Invesco offers a few ESG-focused funds, such as the Invesco ESG NASDAQ 100 ETF (QQMG)the Invesco ESG NASDAQ Next Gen 100 ETF (QQJG)the Invesco US Large Cap Core ESG ETF (IVLC), and the Invesco ESG S&P 500 Equal Weight ETF (RSPE).
QQMG will invest at least 90% of its total assets in the securities that make up the Nasdaq-100 ESG Index. The index is designed to measure the performance of companies included in the Nasdaq-100 index that also meet ESG criteria.
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QQJG, meanwhile, invests at least 90% of its total assets in the securities that make up the Nasdaq Next Generation 100 Index, which is designed to measure the performance of companies that also meet specific ESG criteria.
To meet the ESG criteria of QQMG and QQJG, an issuer must not be involved in certain specific business activities, such as alcohol, cannabis, controversial weapons, gambling, military weapons, nuclear energy , oil and gas, etc., and tobacco. An issuer must also be deemed compliant with the UN Global Compact principles, meet business controversy level requirements, and have an ESG risk rating score that meets index inclusion requirements.
IVLC will primarily invest at least 80% of its total assets in publicly traded equity securities of large capitalization US issuers. The fund seeks to achieve its investment objective by investing primarily in common stocks of US companies that meet high ESG standards.
RSPE, which debuted last November, tracks the S&P 500 Equal Weight ESG Leaders Select Index. While this index aims to provide broad exposure to companies with favorable ESG scores, it is also a more than adequate avenue for investors seeking exposure to companies with climate change credentials. RSPE and its underlying index are also important today as more and more market participants emphasize ESG ratings and ratings.
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