U.N. Climate Talks Bring Low Carbon ETFs into the Spotlight

With the United Nationals climate talks set to begin next week and Microsoft (NasdaqGS: MSFT) co-founder Bill Gates launching a multi-billion-dollar clean energy and research initiative, investors can also look at more socially responsible strategies with exchange traded funds.

For instance, investors seeking to invest in companies that have a smaller impact on the global environment typically follow characteristics described under sound environmental, social and governance, or ESG, principles. Retail investors interested in ESG investments can also take a look at the SPDR MSCI ACWI Low Carbon Target ETF (NYSEArca: LOWC) and the iShares MSCI ACWI Low Carbon Target ETF (NYSEArca: CRBN) for socially responsible strategies.

Specifically, LOWC and CRBN both target the MSCI ACWI Low Carbon Target Index, which tries to address carbon exposure by overweighting companies with low carbon emissions relative to sales and per dollar of market capitalization, compared to the broader market. Both ETFs were created for the U.N. Joint Staff Pension Fund.

Investors may find familiar brands among LOWC and CRBN’s holdings, including Apple (NasdaqGS: AAPL), Microsoft, General Electric (NYSE: GE), Johnson & Johnson (NYSE: JNJ) and Wells Fargo (NYSE: WFC) among the ETFs’ top holdings.

International companies and countries are taking a closer look at their impact on the global environment. Ahead of the U.N. climate talks next week, Microsoft co-founder Bill Gates has pledged $2 billion of his personal wealth to “bend the curve” on climate change over the next five years, CNBC reports.

According to GreenWire, Gates and a group of developing and developed countries will agree to double their research and development budgets to boost clean energy deployment.