Europe’s first clean energy ETF incorporating carbon offsetting

The HANetf S&P Global Clean Energy Select HANzero UCITS ETF (ZERO) has listed on the London Stock Exchange; tracking the S&P Global Clean Energy Select index, the fund offsets CO2 emissions through its HANzero projects provided by South Pole.

ZERO offer exposure to the 30 largest pure-play companies in the biofuel, fuel cell technology, geothermal energy, hydroelectricity, solar and wind industries; it has a total expense ratio of 0.55%.

There are other clean energy indices, but ZERO’s carbon offset mechanism is the first to be incorporated within the European ETF wrapper.

ZERO will takes monthly data from S&P Dow Jones Indices (SPDJI) to gauge the CO2 emissions produced by its Global Clean Energy Select benchmark, and then offsets them through its ‘HANzero’ projects provided by South Pole, which so far include the Topaiyo forest conservation project in Papua New Guinea and the Musi River hydro plant in Sumatra.

The associated costs from these projects are taken from the ZERO’s TER so no extra costs are passed onto the investor.

Commenting on the launch, Nik Bienkowski, co-founder and co-CEO at HANetf, said: ‘Environmentally conscious investors can now target capital growth with the ZERO, safe in the knowledge that any carbon emissions linked to their investment will be offset in some exciting global climate positive projects with our partners at South Pole.

‘Investors are demanding action from their investment providers, and we are delivering new ESG features such as the carbon offset under our trademark HANzero.’

Som Seif, founder and CEO of Purpose Investments, who has partnered with HANetf to launch ZERO, said: ‘The election of President Joe Biden has increased optimism about green policies as demonstrated by the US re-joining the Paris Agreement.

‘The increased commitment by other leading countries is rapidly building momentum to tackle climate change and decarbonisation is at the centre of this shift linked to government policy and the improving economics of the underlying technologies.’

Co-CEO and founder of HANetf Hector McNeil told DIY Investor: ‘ZERO is the first ETF in Europe to offset the carbon impact of the investment and provide a carbon neutral investment. Clearly there is a huge interest with investors for ESG related strategies, but even low carbon versions strategies still have a carbon footprint. Add into that that most companies and organisations are only aiming for carbon neutrality by 2050, but most ESG interested investors feel this is too late. HANzero™ helps expedite this.

‘ZERO also uses the highly popular S&P Clean Energy index. This is the same index that Ishares Clean Energy ETF – INRG used until it expanded the constituents. We decided to stick with the original index as its a purer play and we felt a significant number of investors wanted that exposure. It is also 55bps TER 10 bps cheaper than INRG and also includes the carbon offsetting at no extra cost.

HANetf trademarked this offsetting approach as HANzero™, which in summary works as follows:

• S&P calculates the carbon impact of the investment
• HANetf sources carbon offset programmes to invest in to offset the above
• HANetf takes part of the TER to pay for these programmes as the investment grows

‘We are working on future products and the trademark will be included in the name to indicate it being part of the ETF; we believe HANzero™ will be as impactful as currency hedging’.

See the factsheet for ZERO ETF here >

See the presentation for HANzero here >

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Learn more about the Clean Energy ETF 

Part 1: Introduction to the Clean Energy ETF | ZERO

Part 2: Investors Guide to Clean Energy | Sources of Clean Energy

Part 3: Investment Case for Clean Energy

Part 4: Introducing the HANetf S&P Global Clean Energy Select HANzero™ UCITS ETF

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