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
HANetf S&P Global Clean Energy Select HANzero™ UCITS ETF
ZERO is an UCITS compliant ETF
domiciled in Ireland. The fund tracks the S&P Global Clean Energy Select
fund provides a unique exposure to the clean energy sector set to benefit from
the ongoing fight against climate change. By partnering with South Pole, the
fund provides credible carbon offsets to balance out the carbon cost of the
portfolio as determined by Trucost.
The Clean Energy ETF will list on London Stock
Exchange, Borsa Italiana and XETRA.
Capital Growth Objective
The strategy provides
concentrated exposure to businesses in the global clean energy sector, as
defined by the S&P Global Clean Energy Select Index. With firm global
consensus to fight climate change, the energy sector will be at the centre of
policy to catalyse transition to sources that are less carbon-intensive.
True net zero carbon footprint from offset
HANetf will be the first to offer
true net zero energy exposure, using South Pole as a credible partner to offset
the index carbon footprint as defined by Trucost.
Well-defined carbon footprint
The manager uses Trucost, an
S&P company, to generate a robust value of carbon emissions per $1million
Credible partner in identifying legitimate
carbon offset projects
There are a number of nascent
companies emerging to help businesses and individuals quantify and offset
carbon emissions. Han has partnered with South Pole, which has been in this
business since 2006.
Robust carbon credit project selection criteria
This is an emerging industry,
based substantially in developing countries where anti-corruption controls are
not as well-established. Experience and established project selection
frameworks (Real, Additional, Measurable, Verifiable, Permanent, Unique)
incorporating third party verification are critical to avoid reputational
damage and deliver the stated solution to investors with confidence.
No need for DIY carbon offset
As above, HANetf uses Trucost to
measure and South Pole to offset in a world where data availability is limited
and offsets programs require sophisticated diligence.
Low cost offsetting
At current pricing and an assumed
54.5 tonnes per $1million invested p.a., we estimate an offset cost of $457.80
per $1 million or <5 bps that will be wrapped within the management fee.
Purpose Investments, in partnership with Sustainalytics, has
implemented ESG as a material factor in investment processes across its entire
product suite. The firm has expertise in identifying and analysing relevant
issues in evaluating investments across industries.
5 Year Indices Performance Comparison (Net Total Return)
before inception is based on back tested index data. Back testing is the
process of evaluating an investment strategy by applying it to historical data
to simulate what the performance of such strategy would have been. Back tested
data does not represent actual performance and should not be interpreted as an
indication of actual or future performance. Past performance for the index is
in USD. Past performance is not an indicator for future results and should
not be the sole factor of consideration when selecting a product. Investors
should read the prospectus of the Issuer (“Prospectus”) before investing and
should refer to the section of the Prospectus entitled ‘Risk Factors’ for
further details of risks associated with an investment in this product. Source:
Bloomberg/S&P. Data as of 01/06/2021
By design, the fund references and index that is relatively
concentrated across a limited set of sub themes, including renewables
businesses and utilities.
Businesses principally engaged in electricity generation from non-finite sources such as solar and wind.
Vestas Wind Systems A/S, Plug Power, Brookfield Renewable Partners, First Solar
Utilities which supply electricity principally generated from renewable sources.
Verbund AG, EDP Renovaveis SA, Orsted A/S
Carbon credits that are used by the manager to offset emissions attributable to the fund’s investments in underlying portfolio companies.
Global Clean Energy Select Index
Stocks that meet the
eligibility criteria are reviewed for specific practices related to clean
energy in their business description. Index constituents are drawn from S&P
Global BMI. The universe of companies that may be considered eligible for potential
index inclusion is determined by S&P Dow Jones Indices based on factors
such as a company’s business description and its most recent reported revenue
by segment. Companies are identified as being in the clean energy business for
their involvement in the production of Clean Energy or provision of Clean
Energy Technology & Equipment, including but not limited to:
- Biofuel & Biomass Energy Production
- Biofuel & Biomass Technology & Equipment
- Ethanol & Fuel Alcohol Production
- Fuel Cells Technology & Equipment
- Geothermal Energy Production
- Hydro Electricity Production
- Hydro-Electric Turbines & Other Equipment
- Photo Voltaic Cells & Equipment
- Solar Energy Production
- Wind Energy Production
- Wind Turbines & Other Wind Energy Equipment
After determining the eligible
universe, the index components are selected as follows:
- The 30 largest stocks,
as ranked by FMC, with exposure scores of 1 are selected and form the index.
- If there are fewer than
30 stocks with an exposure score of 1, the largest stocks from the eligible
universe with an exposure score of 0.75 are selected until the target
constituent count of 30 is reached.
- If after Step 3 there
are still not 30 constituents, the highest-ranking stock with an exposure score
of 0.5 is selected until the target constituent count of 30 is reached.
- All selected companies
are then subjected to the same carbon-to-revenue footprint constraint applied
to the S&P Global Clean Energy Index which is:
For all companies selected in the
prior steps, those with an S&P Trucost Limited (Trucost) carbon-to-revenue
footprint standard score greater than three are excluded from index inclusion. Companies
without Trucost coverage are eligible for index inclusion. If there are 30
stocks selected in the previous step, those excluded stocks with a
carbon-to-revenue footprint standard score greater than three are replaced with
the next highest ranked stocks in order to reach the index’s target constituent
count of 30. Replacement stocks must have a carbon-to-revenue footprint lower
than those being replaced to qualify for index addition. If, after this step,
the index’s weighted average exposure score falls below 0.85, the lowest
ranking stock with an exposure score of 0.5 is removed until the index’s weighted
average exposure score reaches 0.85. Therefore, it is possible for the final
index constituent count to be below 30.
The carbon-to-revenue footprint
data used in the methodology is calculated by Trucost, and is defined as the
company’s annual GHG emissions (direct and first tier indirect), expressed as
metric tons of carbon dioxide equivalent (tCO2e) emissions, divided by annual
revenues for the corresponding year, expressed in millions of US dollars.
Trucost’s annual research process evaluates the environmental performance of a
given company with one output of this process being its annual greenhouse gas
At each rebalancing, constituents
are weighted based on the product of each constituent’s FMC and exposure score,
subject to a single constituent weight cap of 4.5
For full methodology, please
Learn more about our Clean Energy ETF put visiting the fund page here