State Street Global Advisors has launched an S&P 500 exchange-traded fund (ETF) that will exclude companies on environmental, social and governance (ESG) grounds.
The strategy will track the recently launched S&P 500 ESG Exclusion II index that has been devised to exclude companies based on data from ESG research firm Sustainalytics.
Reviewed on a quarterly basis, the index uses exclusion criteria aimed at eliminating exposure to controversial weapons, civilian firearms, tobacco firms and the coal industry.
It is also designed to screen out companies that do not comply with the ten principles of the UN Global Compact – a non-binding pact that encourages business to adopt more sustainable practices.
Mandy Chiu, head of ETFs at the asset manager, said: “It is clear investors are increasingly focused on seeing ESG concerns addressed in their portfolios and want to take advantage of the many benefits offered by ETFs to do this.”
The SDPR S&P 500 ESG Screened Ucits ETF has been listed on Xetra and was set to be listed on Euronext Amsterdam and Borsa Italiana on December 4. It will also be listed in Switzerland.
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