ESG metrics on Invesco's clean energy ETF range will tighten to align with EU fund naming rules.
The $34m Invesco Global Clean Energy UCITS ETF (GCLE), the $3.6m Invesco Hydrogen Economy UCITS ETF (HYDE) and the $5m Invesco Wind Energy UCITS ETF (WNDE) will see their respective Solactive indices tighten exclusion metrics for thermal coal extraction.
Solactive will also introduce new oil and gas activity exclusion thresholds.
In an announcement, the index provider said the changes have been made to its Wilderhill indices range to “allow all products that track the index to have a clean energy or sustainable label to maintain attractiveness to investors,” by aligning with Paris-aligned benchmarks.
The changes come as the European Securities and Markets Authority (ESMA) updated its guidelines on ESG fund naming rules last month, setting a 21 November deadline.
Under the rules, published last month, funds with the term ESG or sustainable in their name must have at least 80% of investments tied to environmental or social characteristics.
In addition, funds with ESG or sustainable in their name must also not include fossil fuel companies, adhering to Paris-Aligned Benchmark (PAB) exclusion metrics.
Invesco’s clean energy ETF range also saw methodology tweaks in 2023 in order to comply with the Sustainable Finance Disclosure Regulation (SFDR), excluding companies missing “critical” ESG data.
Elsewhere, MSCI renamed over 100 ESG indices to align with incoming sustainability product naming rules in Europe and the UK, including its MSCI World ESG Screened index, the MSCI Europe ESG Screened index and the MSCI USA ESG Screened index.
