Tabula IM: Research reveals growing focus on ESG ETFs

Tabula IM: Research reveals growing focus on ESG ETFs

March 8, 2022

ETFs ESG
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New research[1] from European ETF provider Tabula Investment Management Limited (“Tabula”) reveals European fund managers, wealth managers, private banks and family offices are increasingly focusing on ESG ETFs.

45% of the professional investors interviewed, who collectively manage $ 145 billion, say they are required to use ESG-focused ETFs. A further 47% say they choose to use them, and of the 8% who currently don’t invest in these vehicles, all say they expect to in the future.

In terms of which ESG screening approaches professional investors look for when choosing fund investments, 65% highlight ESG rating, followed by 56% who cite the basic exclusion of companies in harmful sectors. Over half look for climate objectives, such as alignment to the Paris Agreement or EU benchmarks, and 19% cite thematics – investing in certain sustainable sectors such as renewables.

Over half of Tabula’s assets are now in SFDR Article 8 or 9 ETFs. Article 8 funds promote, among other characteristics, environmental or social characteristics, or a combination of these, and Article 9 funds have sustainable investment or a reduction in carbon emissions as their objective.

ESG has been a key driver in Tabula’s asset growth, which recently topped $ 725 million.

Commenting on the research findings Michael John Lytle, CEO of Tabula, said, “Professional investors continue to place a growing focus on the necessity of meeting sustainability targets, and this trend is accelerating. Fund managers need to have ESG at the core of everything they do – from the way they operate as a business, to the investment strategies adopted by their funds.” 

Tabula’s business operations are officially certified as carbon neutral by Carbon Neutral Britain™, the UK's leading carbon offsetting initiative.

Tabula was the first ETF provider to launch an SFDR Article 9 fixed income ETF aligned to the Paris Agreement on Climate Change. The € 115 million Tabula EUR IG Bond Paris-Aligned Climate UCITS ETF (Ticker: TABC GY) delivers exposure to Euro investment grade bonds and currently provides 52% lower greenhouse gas emissions when compared to the broad market, and an annual decarbonisation of at least 7%. In February the firm added the SFDR Article 9 Tabula EUR HY Bond Paris-Aligned Climate UCITS ETF (Ticker: THEP GY) to its stable, offering a 79% emissions reduction to the broad EUR high yield market. The fund has grown to ~$ 60 million in a little over a month.

Tabula is a signatory to the UN-supported Principles for Responsible Investment, and it has joined the Institutional Investor Group on Climate Change. It is also a signatory to the Climate Action 100+ initiative, where it aims to actively engage with bond issuers.

 

[1] Tabula Investment Management commissioned the market research company PureProfile to survey 100 professional investors across Italy, France, Germany, the UK and Switzerland (20 in each country). Collectively they manage ~$ 145billion in assets, and they work for European fund managers, wealth mangers, private banks and family offices. Interviews were conducted online in February 2022.

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