State Street launches suite of four Paris-aligned ESG ETFs

State Street Global Advisors (SSGA) has become the latest issuer to unveil a suite of Paris-aligned ESG ETFs with the launch of four strategies, ETF Stream can reveal.

The SPDR MSCI Europe Climate Paris Aligned UCITS ETF (SEPA), the SPDR MSCI USA Climate Paris Aligned UCITS ETF (SPUD) are both listed on Deutsche Boerse, Borsa Italiana and the London Stock Exchange while the SPDR MSCI World Climate Paris Aligned UCITS ETF (SWPA) is also listed on Euronext Amsterdam.

Meanwhile, the SPDR MSCI Japan Climate Aligned UCITS ETF (SPF6) is listed on the Deutsche Boerse.

The ETFs track their respective geographical MSCI Climate Paris Aligned indices. SPUD and SPF6 have total expense ratios (TERs) of 0.12% while SEPA and SWPA both charge 0.15%.

The indices offer exposure to large and mid-cap stocks aligned with the Paris Aligned Benchmarks (PAB) and require a 50% reduction in greenhouse gas emissions compared to the parent index, followed by a 7% year-on-year reduction.

All four ETFs are classified as Article 8 under the Sustainable Finance Disclosure Regulation (SFDR).

Companies involved in controversial weapons will be excluded along with securities that derive more than 1% of their revenue from thermal coal mining and extraction, 10% from petrochemicals of 50% from power generation from thermal coal, oil or natural gas.

The ETFs are also aligned with Scope 3 of the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations.

There has been a growing number of PAB ETF launches over the past year. DWSInvesco and HSBC Asset Management have all launched similar products as the shift to sustainable investing intensifies.

Published on March 10, 2022

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