DWS Launches Nordic Net Zero Pathway Paris Aligned ETF tracking Solactive Index

Solactive is pleased to announce that DWS is expanding its family of Net Zero Pathway ETFs – now with a Nordic offering. The DWS Xtrackers Nordic Net Zero Pathway Paris Aligned UCITS ETF (XNZN ) will track the Solactive ISS ESG Nordic Investable Universe Net Zero Pathway Index, which follows the same climate reduction targets as the rest of the series. The index encompasses companies that comply with the regulations laid out for EU Paris-Aligned Benchmarks and recommendations published by the IIGCC in their Net Zero Investment Framework. The ETF will be listed on Xetra and LSE.

ESG investing has been gaining more and more traction over the years, especially with regard to achieving a net-zero emissions economy by 2050 and limiting global warming to 1.5°C above pre-industrial levels (the two main objectives of the Paris Climate Accords). In this light, the Solactive ISS ESG Nordic Investable Universe Net Zero Pathway Index (part of the Solactive ISS ESG Net Zero Pathway Index Series), aims to represent companies that comply with the regulations of the EU Paris-Aligned Benchmarks (EU PAB) regarding the minimum standards for EU Climate Transition Benchmarks and EU Paris-Aligned Benchmarks.

Accordingly, the index provides a 50% reduction in carbon intensity versus the corresponding non-ESG market benchmark, and a 7% year-on-year ongoing decarbonization pathway. In addition, the series takes into consideration the recommendations of the Net Zero Investment Framework¹ from the IIGCC (Institutional Investors Group on Climate Change), reweighting components according to carbon intensity and to their commitment to the Science Based Target Initiative (SBTI)² and Task Force on Climate-related Financial Disclosures (TCFD) reporting standards³. The index members are overweighted through three distinct pillars: adoption of science-based targets, high climate disclosure standards, and mitigating climate change via ‘green’ revenues. Hence, climate metrics are the primary determinant of index member weighting.

Only companies operating in accordance with market standards for responsible business conduct (Norms-Based Research) are included in the index. These standards are based on established norms such as the United Nations Global Compact and on the exclusion of significant involvement in certain sectors. Furthermore, companies are screened for their involvement in controversial weapons and other non-compliant activities.

Timo Pfeiffer, Chief Markets Officer of Solactive, comments: “We are delighted to continue our collaboration with DWS, which is expanding its range of Net Zero Pathway ETFs tracking our Paris-Aligned indices. Solactive’s established strengths in the ESG space aim to provide our clients with the most streamlined and suitable ESG index solutions. The expansion of the Solactive ISS ESG Net Zero Pathway Index Series represents the continuation of a joint effort between DWS and Solactive to provide investors with the next step in sustainable investing”.

Peter Lidblom, Head of Xtrackers Nordic:  “The new ETF further underlines Xtrackers’ commitment to the Nordic region und reflects the strong demand for climate focused exposure from Nordic investors. We have worked closely with our client’s investment team in developing this index to meet the requirements for a well-diversified index still maintaining similarities to traditional core Nordic benchmarks.”

¹ The Institutional Investors Group on Climate Change (IIGCC) is the European membership body for investor collaboration on climate change. Its mission is to support the investment community in driving significant progress towards net zero by 2030. https://www.iigcc.org/resource/net-zero-investment-framework-implementation-guide/

² The Science Based Targets Initiative SBTI aims to align emissions reductions and net-zero targets in line with climate science.

³ The Financial Stability Board created the Task Force on Climate-related Financial Disclosures to improve reporting of climate-related financial information.