Northern Trust Asset Management’s FlexShares has announced the launch of a new ESG ETF focused on climate with exposure to emerging markets.
The FlexShares ESG & Climate Emerging Markets Core Index Fund (NYSE: FEEM) seeks to help investors improve their portfolio’s overall ESG score and reduce carbon risk while maintaining core equity exposure. It utilizes the Northern Trust ESG Vector Score which looks to identify ESG-related business issues most likely to impact a company’s financial performance and a portfolio’s investment return.
In partnership with Institutional Shareholder Services (ISS), each company is also examined using a carbon risk rating methodology to determine its current carbon emissions, its efforts to reduce its carbon footprint, and its potential exposure to carbon-risk relative to other companies in its industry. The fund targets a reduction in aggregate carbon emissions and carbon reserves relative to its parent index, while also targeting an overall improvement in its carbon risk rating.
“The addition of the FlexShares ESG & Climate Emerging Markets Core Index Fund will complement FlexShares’ existing climate funds, providing investors a diverse set of core sustainability products they can use for exposure across the globe,” said Crystal McClenthen, Head of Product Strategy, Funds and Managed Accounts at NTAM. “The combination of our ESG Vector Score and carbon risk rating creates a transparent and consistent approach to ESG measurement, which is particularly important when it comes to identifying opportunities in emerging markets.”