The effects of climate change are already being felt, inspiring many companies to targeted net-zero emissions in their business operations and products. Achieving carbon reduction goals and transitioning to a low-carbon economy will significantly impact many industries over the next few decades. Investors may want to consider the opportunities that these transformations will generate.
In the upcoming webcast, Transitioning to Net Zero: What Investors Need to Know, Jordan Farris, Managing Director, ETF Product Management and Development, Nuveen, and Kelly Hagg, Senior Managing Director, Head of Responsible Investing Strategy and Solutions, Nuveen, will discuss what net-zero investment is and why advisors should pay attention.
Climate change can create unique investment opportunities. Specifically, Nuveen has recently come out with the Nuveen Global Net Zero Transition ETF (NASDAQ: NTZG) to express conviction in the ongoing transition of the global economy toward “net zero” carbon emissions. NTZG is an actively managed global equity ETF seeking to outperform the MSCI All Country World Index (ACWI) with a focus on carbon emissions reductions.
In a bid to align with the goals of the Paris Climate Agreement on avoiding dangerous climate change, the ETF’s underlying holdings are comprised of components focused on climate leaders that have committed to carbon-reduction plans validated as Paris-aligned, as well as companies with the credible intention to reducing carbon; companies providing disruptive technology that significantly supports climate mitigation; and high-carbon emitters where reduction will represent a meaningful contribution to real-world emissions decline.
“In aggregate, the portfolio holdings will demonstrate reduced carbon emissions over time at a faster pace than required by the Paris Climate Agreement,” according to Nuveen.
Nuveen’s net-zero stewardship approach focuses on the portfolio’s highest carbon emitters to move companies closer to meaningful reductions in their emissions. Key elements of the approach include communicating and regularly meeting with companies to establish expectations regarding climate strategy, recommending enhancements to strategies and monitoring progress against goals, and taking other action where necessary, such as voting on climate-related shareholder proposals to compel additional progress on carbon reduction.
The strategy also does not give up its goal of providing upward growth in favor of its net-zero focus.
The ETF executes “security selection through rigorous bottom-up research seeking value creators with an attractive valuation or investment catalysts with upside potential,” according to Nuveen.
Financial advisors who are interested in learning more about the transition to net zero and the investment opportunities involved can register for the Wednesday, December 7 webcast here.