Invesco has launched two new ESG ETFs covering listed companies in Japan and the Pacific ex Japan region.

The ETFs will track customised versions of MSCI ESG Universal indices that excludes controversial business practices and applies ESG Momentum to increase exposure to companies that are actively improving their ESG profile. Excluded stocks include conventional or nuclear weapons, civilian firearms, oil sands, thermal coal, tobacco or recreational cannabis as well as any company that has faced severe controversies over ESG issues in the past three years.

Gary Buxton, Head of EMEA ETFs and Indexed Strategies at Invesco, said: “With 60% of all equity ETF flows last year going into funds with an ESG objective, demand is clearly strong. We believe ESG will be embedded even more broadly into portfolios with investors no longer needing to sacrifice their investment objectives to follow their principles. Our suite of MSCI ESG Universal ETFs offers investors low-cost tools to construct diversified equity portfolios. We will continue building out our ESG offering in response to market opportunities and driven by investor demand.”