Solactive Serves as Index Provider for World’s First Paris-Aligned Bond ETF Released by Tabula Investment Management
ESG investing experienced a surge in demand in 2020, and 2021 is expected to hold onto this growth trajectory. While progress in Social and Governance initiatives gained substantial traction, undeniably, the E part of ESG, encapsulating all aspects of green financing, makes up the lion’s share of impact investing. Now, Tabula Investment Management (Tabula) breaks new ground by issuing the world’s first Paris-Aligned bond ETF, which serves as the first passive Paris-Aligned offering for conscious fixed income investors. The ETF tracks the Solactive ISS Paris Aligned Select Euro Corporate IG Index.
The Paris Agreement serves as one of the most influential global conventions, and it aims to keep the increase of global average temperature below a critical threshold of 2°C. Solactive’s Paris-aligned Benchmarks (PAB) allow investors to be present at the forefront of an immediate transition towards the Paris Agreement’s goals. Tabula recognized the demand and issued the Tabula EUR IG Bond Paris-aligned Climate UCITS ETF. Compared to the broad market, the ETF allows investors to gain exposure to Euro investment-grade bonds from companies with 50% lower greenhouse gas emissions. Furthermore, the ETF features annual decarbonization of 7%.
In addition to its climate-centric approach, the ETFs’ underlying index, the Solactive ISS Paris Aligned Select Euro Corporate IG Index, features a sound ESG screening, which excludes companies that violate common norms such as human or labour rights, or with verified or alleged ongoing involvement in controversial weapons, or businesses that crucially affect the environmental.
“Tackling climate change is arguably the defining issue of our age, and addresses a major risk to all investment portfolios,” says Tabula CEO, Michael John Lytle. “Investors need to utilise specialist climate solutions, and there needs to be a major shift of large asset pools into a range more climate impact investments.”
Tabula CIO, Jason Smith, added, “The investment management industry has a duty to develop more innovative and higher impact ways to help divert investment into companies with strong ESG credentials. We believe our latest ETF is the best passive example of this in the fixed income space. We also need to prevent greenwashing and misleading low-carbon claims, improve transparency and comparability, while incorporate broader ESG screening.”
Timo Pfeiffer, Chief Markets Officer at Solactive, comments: “Tabula’s innovative approach to passive fixed income has resulted in a liquidity-focused core IG ETF that exceeds the emissions reduction goals of the Paris climate agreement. We are happy that we can serve as the index provider for this meaningful and important ETF that helps to make the world a greener place.”
The Tabula EUR IG Bond Paris-aligned Climate UCITS ETF (EUR) – Acc. was listed on Xetra on January 14th, 2021 with ticker TABC. An SEK-Hedged Accumulating share class will list on Cboe on January 15th, 2021.