ESG overload

UK

LGIM makes exclusions

LGIM has added another arrow to its ETF quiver, listing an ESG screened Europe tracker.

The L&G Europe Equity (Responsible Exclusions) UCITS ETF (RIEU) has listed on the LSE, with €200m seed money from Finnish pension insurer Varma.

RIEU tracks an index from Foxberry, a London-based index startup. The ESG aspects of this index are opaque. The available index literature says only that the index is market weighted with a Foxberry-led investment committee making exclusions. Given the size of the seed funding, one images Varma may have a seat on the committee.

Foxberry have provided more detail on the ESG framework for the new ETF tracked by LGIM. More detail is available here and here. Varma, along with LGIM, both have seats on the committee which meets quarterly. 

The fund charges 0.16%. 

Canada

CI Financial lists ESG ETF in Toronto 

CI Financial, one of Canada’s largest asset managers, is adding to Canada’s swelling throng of ESG ETFs, listing the CI First Asset MSCI World ESG Impact ETF (CESG).

CESG tracks an ESG version of the famous MSCI World Index, with both positive and negative screening. The negative screen kills off the predictable corporate baddies in fossil fuels, guns, booze, porn, gambling etc. The positive screen looks for companies that generate more than 30% of sales from social and sustainable themes.

Sector weights are capped at 25%, presumably to block a tech sector blowout and issuers are capped at 5%.

The fund charges 0.55%. A currency hedged version of the same fund is forthcoming.