Alternative Investments: New Biodiversity ETFs From DWS Launch In Europe

DWS ETFs: According to the WEF, the loss of biodiversity will have the third largest negative impact on humanity in the next ten years after climate change and extreme weather.

DWS has introduced three new Xtrackers ETFs aimed at mitigating investment risks related to biodiversity loss. These ETFs provide an opportunity to invest in companies globally, particularly in Europe and the US, with a reduced negative impact on the earth’s ecosystems compared to the market average. Biodiversity, essential both ecologically and economically, is highlighted as pivotal, with estimates valuing ecosystem services at USD 125 to 140 trillion annually.

The impact of biodiversity loss is projected to rank third in its negative influence on humanity, following climate change and extreme weather, according to the World Economic Forum. The new ETFs enable investors to seamlessly integrate biodiversity considerations into their portfolios. These products track ISS STOXX Biodiversity Focus SRI indices, which, in terms of sustainability, identify and mitigate risks associated with biodiversity, extending beyond the usual ESG criteria to encompass environmental, social, and governance factors.

The ETFs utilize a multi-stage filter to exclude companies detrimental to biodiversity, such as those involved in palm oil, genetically modified agricultural products, or hazardous pesticides. Additionally, they employ the ISS ESG Biodiversity Impact Assessment Tool to further screen and eliminate companies with the most significant negative impact on biodiversity within their sectors. The UN’s biodiversity and climate-related development goals are integral in the selection process, ensuring a portfolio with at least a 50% reduced CO2 intensity compared to the broad market index.

According to Olivier Souliac, Head of Indexing Xtrackers Products at DWS, these ETFs transparently reduce biodiversity-related risks within broadly diversified equity investments.

Related Story:  DWS Unveils Suite Of High Dividend, Low Carbon ETFs

Photo by S N Pattenden on Unsplash

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