Invest in These ESG Funds as the Race to Curb Global Warming Heats Up

As the goal of keeping the global temperature below 1.5°C becomes increasingly out of reach, members of the Paris Agreement are establishing a commission to address the dire effects of the global temperature exceeding the 1.5°C or even 2°C.

Set to launch this month, the Climate Overshoot Commission will consist of 15 former ministers, presidents, and international organization representatives and explore options for deep adaptation, carbon dioxide removal (CDR), and geoengineering. The commission will address questions around the ethics and feasibility of how to potentially reverse global warming that are problematic or unproven on a large scale. Pascal Lamy, former director general of the World Trade Organization and president of the Paris Peace Forum will chair the new commission.

“The primary strategy to combat climate change should remain reducing greenhouse gas emissions, but it has also become necessary to explore additional strategies,” said Jesse Reynolds, executive secretary of the commission, told Climate Home News.

For investors looking to make their portfolios more environmentally conscious and socially responsible, Invesco has a few ESG-focused funds, such as the Invesco ESG NASDAQ 100 ETF (QQMG), the Invesco ESG NASDAQ Next Gen 100 ETF (QQJG), the Invesco US Large Cap Core ESG ETF (IVLC), and the Invesco ESG S&P 500 Equal Weight ETF (RSPE).

QQMG will invest at least 90% of its total assets in the securities that comprise the Nasdaq-100 ESG Index. The Index is designed to measure the performance of companies included in the Nasdaq-100 Index that also meet ESG criteria.

Looking At The NextGen

QQJG, meanwhile, invests at least 90% of its total assets in the securities that make up the Nasdaq Next Generation 100 Index, which is designed to measure the performance of companies that also meet specific ESG criteria.

To satisfy the ESG criteria for QQMG and QQJG, an issuer must not be involved in certain specific business activities, such as alcohol, cannabis, controversial weapons, gambling, military weapons, nuclear power, oil & gas, etc., and tobacco. An issuer must also be deemed compliant with the United Nations Global Compact principles, meet business controversy level requirements, and have an ESG Risk Rating Score that meets the requirements for inclusion in the index.

IVLC will primarily invest at least 80% of its total assets in exchange-traded equity securities of U.S. large capitalization issuers. The fund seeks to achieve its investment objective by investing mainly in the common stock of U.S. companies that meet high ESG standards.

RSPE, which debuted last November, follows the S&P 500 Equal Weight ESG Leaders Select Index. While that index intends to provide broad exposure to companies with favorable ESG scores, it’s also a more than adequate avenue for investors seeking exposure to companies with climate change credentials. RSPE and its underlying index are also important today because more market participants are emphasizing ESG ratings and scoring.

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