ETF newcomer iClima is launching its first two U.S.-listed ETFs, which aim to provide exposure to the next generation of companies combating global warming and rising emissions, in an attempt to invest along a mandate of “do more good” instead of less harm, per the iClima press release.
The iClima Global Decarbonization Transition Leaders ETF (CLMA) and the iClima Distributed Renewable Energy Transition Leaders ETF (SHFT) will both trade on the NYSE and have an expense ratio of 0.65%.
Both ETFs evaluate stocks based on their gigatons of “Potential Avoided Emissions” in terms of CO2e per year. CO2e is a composition of all greenhouse gases, including methane and nitrous oxide. It provides a more holistic look at greenhouse gas emissions.
“These two funds are a practical way for investors to join the next wave of companies leading the green transition,” said Gabriela Herculano, iClima co-founder and CEO. “The next generation of climate change investment does not revolve only around emissions reduction, instead, it’s laser focused on the leading companies that provide products and services that enable emissions avoidance altogether.”
“CLMA and SHFT will appeal to investors who have a strong interest in sustainability themes and early adopters who are seeking more impactful portfolio exposure to technology-forward solutions in the ongoing fight against climate change,” she added.
CLMA: A Core ESG Holding
Devised to be a core holding for investors, CLMA tracks the iClima Global Decarbonization Enablers Index, the world’s first benchmark to track companies producing revenue from products and services that avoid CO2e. The fund invests across all market caps and in developed and emerging markets.
Unlike other ESG ETFs that seek to reduce their carbon emissions or don’t have the methodology to quantify carbon avoidance, CLMA quantifies the CO2e impact of companies it invests in.
The ETF, which will hold 157 securities as of launch, invests across five sustainability sectors: green energy, green transportation, water and waste improvements, decarbonization enabling solutions, and sustainable products. Its sector allocations include energy, consumer staples, industrials, and information technology.
SHFT: Dismantling the Fossil Fuel Energy Grid
Meanwhile, SHFT was created to be a satellite holding for investors.
It tracks the iClima Distributed Renewable Energy Index, which utilizes inclusionary and exclusionary screening to follow companies within the Distributed Energy Resource (DER) business model.
The fund focuses on smaller renewable, distributed power sources and companies that are disrupting the fossil fuel energy grid across all market caps in developed and emerging markets.
SHFT invests in companies within seven segments of the DER model: residential solar panels, electric vehicle charging, energy storage, smart inverters, smart meters, software solutions that leverage AI to manage the system, and vehicle-to-grid energy. These companies are working to create sustainable energy systems that are created and managed close to the point of use. Industries invested in include energy, industrials, information technology, and consumer staples.
SHFT will hold 50 securities at launch.
iClima is a London-based green fintech firm that is female-led by co-founders Gabriela Herculano, the CEO, and Shaila Khan Leekha, the COO.
The firm is focused on redefining green investing and the approach to climate change by focusing on decarbonization in new ways. iClima invests in companies that are advancing their industries with sustainable innovation while producing tangible metrics with their CO2e unit of measurement.
“While the sheer number of competitors in this space is high and only rising, the reality is that no one out there provides this comprehensive of an investment solution to a problem as massive and alarming as global warming,” said Leekha.
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