VanEck’s equity ETF certified by RIAA
VanEck has announced its international sustainable equity exchange-traded fund (ETF) has been certified as “ethical” by the Responsible Investment Association Australasia (RIAA).
The fund was launched on the Australian Securities Exchange (ASX) in March 2018 and aimed to provide investors with access to a portfolio of around 174 “true-to-label” sustainable international companies.
It tracked the MSCI World ex-Australia ex-Fossil Fuel Select SRI and Low Carbon Capped Index, which screens companies based on fossil fuel ownership and revenues, socially responsible activities, environmental, social or governance (ESG) performance, and carbon emissions.
Arian Neiron, VanEck managing director and head of Asia Pacific, said: "We are delighted that our sustainable international equity ETF, ESGI, has been recognised by the RIAA certification program. The program is the first of its kind in the world and was established to help Australian and New Zealand investors make more informed decisions about investing in sustainable financial products.”
According to Neiron, investors needed certainty that fund managers had undertaken scrupulous investigation of each company's business activities to feel confident that the fund they are investing in is truly aligned with their values.
Companies tracked by the ESGI index are selected out of the MSCI World ex-Australia Index, a process that involved three negative screens and one positive screen:
- Step 1: Excludes all companies that own any fossil fuel reserves or derive revenue from mining thermal coal or from oil and gas-related activities;
- Step 2: Excludes all companies whose businesses are involved in socially irresponsible activities such as alcohol, gambling, tobacco, military weapons, civilian firearms, nuclear power, adult entertainment and genetically modified organisms;
- Step 3: Includes leading ESG performers; and
- Step 4: Excludes high carbon emitters.
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