Fixed income ETF provider Tabula Investment Management Limited says advances in Paris-Aligned Benchmarks (PABs) make it easier for investors to meet their responsible investment objectives.
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Michael John Lytle CEO of Tabula Investment Management
Tabula was the world’s first provider of a Paris-Aligned fixed income ETF, having launched the Tabula EUR IG Bond Paris-aligned Climate UCITS ETF in January 2021. The ETF meets the criteria of Article 9 of the EU Sustainable Finance Disclosure Requirements (SFDR).
Tabula worked with index provider Solactive and ESG data provider ISS ESG to develop the ETF benchmark, which delivers strong historical correlation to traditional broad euro investment grade bond benchmarks. In response to investor demand, the three companies have recently collaborated to customise the index further, screening for bond issuers that do not necessarily fall short of the Paris agreement, but which are not aligned to specific ESG criteria. For example, the latest iteration of the index removes weapons manufacturers and companies involved in the sale of recreational cannabis or alcohol.
Hernando Cortina, Head of Index Strategy at ISS ESG, said: “We know that not every off-the-shelf Paris-Aligned index aligns with what investors are looking for, so we are really proud to be able to customise this offering and deliver the solutions clients are seeking.”
In addition, ISS ESG is continually enhancing its approach to Scope 3 emissions, to ensure that the data used to form Tabula’s EUR investment grade Paris-aligned benchmark is the best possible quality, particularly where companies fail to report fully under the Taskforce for Climate Related Disclosure (TCFD) requirements.
Michael John Lytle, Tabula’s CEO, said: “Paris-Aligned benchmarks are critical for investors seeking to limit global warming. But more than that, our investors tell us they want to ensure their portfolios meet more complex responsible investment objectives, which means customisation. By working closely with our index and data providers we are able to deliver a Paris-aligned ETF which also incorporates bespoke activity-based exclusions.”
Source : ETFWorld.co.uk
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