A Socially Responsible ETF That Meets Strict ESG Criterias

Change Finance, a majority women-run money manager, has entered the ETF arena, launching its first ETF strategy that looks beyond fossil fuel-related companies to provide a comprehensive approach to socially responsible investing.

On Tuesday, Change Finance rolled out the Change Finance Diversified Impact U.S. Large Cap Fossil Fuel Free ETF (NYSEArca: CHGX). CHGX has a 0.75% expense ratio.

The Diversified Impact U.S. Large Cap Fossil Fuel Free ETF tries to reflect the performance of the Change Finance Diversified Impact U.S. Large Cap Fossil Fuel Free Index, which follows a rules-based methodology to measure the performance of an equally weighted portfolio of 100 large-cap U.S. companies that meet certain environmental, social and governance standards, according to a prospectus sheet.

The underlying index starts off with the constituents of the Solactive US Large & Middle Cap Index of the 1,000 largest U.S.-listed common stocks, which are then screened against the Index’s ESG criteria based off Oekom Research AG criteria. The methodology is informed by the United Nations Sustainable Development Goals, an internationally agreed-upon standard that seeks to eradicate poverty, protect planetary life support, and achieve lasting peace and dignity for humanity.

“CHGX is a new chapter in investing,” Donna Morton, Change Finance CEO, said in a note. “Our investors want alignment with what they care about, without sacrificing performance. Fossil fuel-free is essential, but CHGX then goes further, divesting not only from companies who dig up, refine, burn and service fossil fuels, but also from companies that are serious polluters, that have significant human or labor rights violations, and that fail to meet a variety of other social and environmental standards. No other ETF does this.”