Home Adult entertainment State Street European Equity ETF abandons ESG index for SRI

State Street European Equity ETF abandons ESG index for SRI


ZPDX becomes 19th ETF to switch to a greener index in the past month

The ESG-screened State Street European Equity ETF will be the latest in a long list of products subject to an index change, as the product assumes a socially responsible investment (SRI) mandate.

As of November 30, the SPDR STOXX Europe 600 ESG Screened UCITS ETF (ZPDX) will become the SPDR STOXX Europe 600 ISR UCITS ETF and will switch from monitoring the STOXX Europe 600 ESG-X index to the STOXX Europe 600 SRI index.

Its current benchmark excludes companies that Sustainalytics considers at odds with Global Standards Screening and those involved in controversial weapons, tobacco production and those that derive revenue or power generation from mining or exploration. thermal coal.

Going further, the new SRI index applies these sector exclusions, as well as exclusions for companies involved in alcohol, adult entertainment, all weapons, gambling, oil and gas and energy. nuclear.

In addition, companies that rank in the top 10% in terms of emission intensity are not included. After these steps, the remaining securities are ranked according to their ESG scores within each of the 11 ICB Industry groups.

The STOXX ISR benchmark then selects the best-ranked securities in each sector until the total number reaches one-third of the number of the parent index.

The company added that the ETF will remain Article 8 compliant under the Sustainable Finance Disclosure Regulation (SFDR), but did not say whether the change in benchmark and name will be accompanied by ticker changes. Product or Total Expense Ratio (TER).

In a statement, a State Street spokesperson commented, “To make this ETF as robust as possible, we wanted to ensure that it was designed to maximize the likelihood of retaining its current Article 8 status under SFDR – in no case guaranteed for ESG tested products – and in addition, seize the opportunity to make the fund compatible with the strong commitment of the Financial Markets Authority (AMF) in favor of sustainable finance. “

A little over two weeks ago, State Street gave an ESG makeover to its Bloomberg Barclays 0-5 Year US High Yield Bond UCITS ETF (SJNK) SPDR, which became the SPDR Bloomberg SASB US High Yield Corporate ESG UCITS ETF October 29.

This is part of a total of 18 European ETFs changes to greener indices over the past month, along with other changes to UBS Asset Management, BlackRock, DWS and Lyxor ETFs.

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