Emissions Must Cap by 2025 — OCEN Invests in Reducers | ETF Trends

In a bombshell report from the IPCC that ran over into the weekend and Monday morning, findings were that carbon emissions must cap by 2025 at the very latest to keep global warming as close to 1.5 degrees Celsius as possible, reports CNBC.

The UN’s Intergovernmental Panel on Climate Change has found that if emissions peak by 2025 at the latest, warming would still trend slightly above 1.5°C before settling below it by the end of the century. Failure to contain emissions by 2025 will result in catastrophic global consequences.

“It’s now or never, if we want to limit global warming to 1.5°C,” IPCC Working Group III co-chair Jim Skea said in a statement released with the report. “Without immediate and deep emissions reductions across all sectors, it will be impossible.”

The 1.5°C landmark was established during the Paris Agreement in 2015, and the scientific consensus is that any warming beyond that, even incremental small amounts, could result in a tipping point from which there is no return, leading to severe weather events, ecosystem collapse, and other massive changes that would threaten communities across the globe.

“We’re not talking about transition anymore. That ship has sailed — or, more like, failed to sail. Instead, the report is very much focused on transformation,” said Julia Steinberger, ecological economist and professor at Switzerland’s University of Lausanne, as well as a lead author on the IPCC report.

“In terms of a trajectory and also in terms of policies, we are just not on track for 1.5 or even 2 degrees,” Steinberger said.

Investing in Emissions Reductions With OCEN

The IQ Clean Oceans ETF (OCEN) invests in the blue economy, which is estimated to be worth roughly $2.5 trillion annually and is anticipated to grow twice as fast as the mainstream economy by 2030.

OCEN seeks to track the IQ Candriam Clean Oceans Index, which offers exposure to companies involved in pollution reduction, carbon efficiency, clean energy, sustainable oceans, or cleaner shipping. These companies offer products or services that work to protect the oceans or promote cleaner oceans, use products or services that accomplish those goals, or else engage in activities that have ocean-related sustainability goals. Companies are not required to be primarily or directly engaged in these activities.

The index screens for ESG requirements in developed and emerging markets and applies an exclusionary screen monthly for companies that don’t comply with the UN Global Compact. The index includes companies of all market caps and utilizes a thematic score based on revenue and impact score to rank the companies it holds. Securities are weighted using a modified market cap-weighted methodology with a minimum weight of 0.25% and a maximum weight of 3% at its quarterly rebalances.

OCEN was developed in alignment with Oceana, the largest international advocacy organization to focus on ocean conservation, and OCEN contributes a portion of its management profits to Oceana.

OCEN carries an expense ratio of 0.45% and currently has 80 holdings.

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