UBS Asset Management has launched the first UCITS ETF to apply Climate Transition Benchmark criteria to the S&P 500 index.

The UBS ETF S&P 500 Climate Transition ESG UCITS ETF offers investors exposure to US large caps with a CTB overlay with the index using a two stage process for selecting and weighting portfolio constituents:

The first step defines an eligible ESG universe by applying business activity exclusions which include companies involved in UN Global Compact violations or exceeding revenue thresholds in activities such as controversial weapons, military contracting, small arms, tobacco, coal, thermal coal, and oil sands or tar sands.

The second step is designed to help investors manage climate transition risks and capture climate change opportunities. This step uses an optimizer to provide for a 30% initial carbon intensity reduction followed by a 7% year-on-year reduction trajectory.

The ETF qualifies as Article 9 under SFDR.

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