Tabula Investment Management Limited has welcomed the introduction of the SFDR (Sustainable Finance Disclosure Regulation), the new EU regulation on fund sustainability disclosures, claiming it will help combat greenwashing by standardising fund-level sustainability reporting.
Michael John Lytle Tabula CEO
- New research reveals extent to which professional investors focus on ESG credentials of funds when reviewing them
New research from Tabula reveals that when institutional investors and wealth managers evaluate new investments in the future, 77% will focus on its ESG rating, and 63% will look for specific ESG labels such as the SFDR level. One in four (24%) will look at the fund manager’s membership of industry bodies such as the UN PRI and Climate Action 100+.
“With a multitude of different approaches from ESG ratings agencies, there is much confusion around the sustainability credentials of individual ESG-labelled funds,” says Michael John Lytle, Tabula’s CEO. “Our research shows just how focused investors and asset owners are on a fund’s sustainability credentials, and the introduction of SFDR will provide much greater clarity and standardisation in this area.”
Under the SFDR, the Tabula EUR IG Bond Paris-aligned Climate UCITS ETF (the “ETF”), has been categorised as an Article 9 product, meaning it contributes to a ‘sustainable objective’ with a specific target of reduction in total greenhouse gas (GHG) emissions. The ETF delivers exposure to Euro investment grade bonds and provides 50% lower total GHG emissions when compared to the broad EUR IG market, and an annual decarbonisation of at least 7%.
The Tabula EUR IG Bond Paris-aligned Climate UCITS ETF is suitable for core allocations as it applies a strict liquidity filter and sector constraints, while historical back-testing calculates that it would have delivered strong historical correlation with traditional broad Euro investment grade benchmarks. Tabula worked with Solactive and ISS ESG to develop the ETF’s benchmark.
The data used for filtering the bonds is supplied by ISS ESG, part of the Institutional Shareholder Services group of companies (ISS). ISS has existed for almost 30 years and has built a leading climate-specific practice for over 10 years. Its data is arguably some of the highest quality available in the market.
Tabula is firmly committed to supporting ESG investing. It is a signatory to the UN-supported Principles for Responsible Investment and also to the Climate Action 100+. In addition, Tabula is a member of the Institutional Group on Climate Change and it aims to actively engage with index providers to improve ESG standards across new and existing fixed income indices.
The Tabula EUR IG Bond Paris-aligned Climate UCITS ETF (EUR) – Acc. is listed on Xetra with a ticker of TABC. The ETF has an ongoing charge figure (OCF) of 25bps. An SEK-Hedged Acc. share class is also listed on Cboe with ticker COOLx and an OCF of 30bps.
Source : ETFWorld.co.uk