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Invesco strengthens ESG criteria for corporate bond and emerging markets ETFs

Effective from 30 November, the firm will update the investment policy of the Invesco GBP Corporate Bond ESG UCITS ETF, Invesco USD High Yield Corporate Bond ESG UCITS ETF and the Invesco MSCI Emerging Markets ESG Universal Screened UCITS ETF to include ESG as an underlying strategy.

Invesco revamps raft of funds

Under the new investment policy, the firm said the funds may now hold some securities “which are not component securities of the reference index, but are similar to them and whose risk, return and ESG characteristics that closely resemble the risk, return and ESG characteristics of constituents of the reference index or the reference index as a whole”.

In a letter to investors, the firm said that the Invesco USD IG Corporate Bond ESG UCITS ETF, Invesco EUR IG Corporate Bond ESG UCITS ETF and Invesco GBP Corporate Bond ESG UCITS ETF will now include additional metrics such as excluding companies that do not have an MSCI ESG rating or controversy score.

Invesco launches suite of ESG ETFs

It will also exclude those companies that have an ESG rating below BB and those that are involved in business activities including alcohol, gambling, nuclear power, adult entertainment and fossil fuels.

Each reference index will also include an issuer cap of 5% and have their names changed to include social responsible investment (SRI).

The exclusionary methodology of the Invesco USD High Yield Corporate Bond ESG UCITS ETF will now be updated to include gambling and fossil fuel companies.

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