Invesco MSCI World ESG Climate Paris Aligned UCITS ETF Acc

Issuer: Invesco

Asset Class: Equity

TER: 19bps

Trading Currency: USD

Pays Income: False

Listing Date: 09 Dec 2021

Ticker: PAWD

ISIN: IE000V93BNU0

This investment product offers exposure to a portfolio of large and mid-capitalization stocks from developed countries around the world. Its primary goal is to align with the objectives of the Paris Agreement, aiming for significant decarbonization. The strategy is constructed to meet the specific requirements of a European Union Paris-Aligned Benchmark (PAB). This involves a substantial reduction in greenhouse gas (GHG) intensity compared to the broader market and a year-on-year self-decarbonization trajectory. The portfolio is designed to reduce the risks associated with the transition to a lower-carbon economy while capturing opportunities in companies leading the way in climate action.

The methodology begins with the parent MSCI World Index and applies a series of exclusions and re-weighting criteria. It systematically excludes companies involved in controversial activities such as controversial weapons, tobacco, and thermal coal, as well as those violating international norms. The core of the strategy is its climate focus, which significantly reduces exposure to companies with high carbon emissions and fossil fuel reserves. Conversely, it increases exposure to companies that are generating green revenues or are on a clear path to reducing their carbon footprint. This optimization process aims to achieve at least a 50% reduction in carbon intensity and maintain a 7% annual decarbonization rate, ensuring the portfolio remains on a trajectory consistent with limiting global warming to 1.5°C.

This fund is suitable for investors seeking to integrate strong environmental criteria into their core global equity holdings without sacrificing broad market diversification. It provides a solution for those who want to proactively manage climate-related financial risks in their portfolio. By investing in companies that are better prepared for a low-carbon future, investors can potentially enhance long-term returns while contributing to positive environmental outcomes. The strategy offers a transparent, rules-based approach to climate-conscious investing, making it an accessible tool for aligning investment portfolios with global climate goals and addressing the urgent challenges of climate change.