Invesco has written to shareholders of its ETF range to update on changes to its ESG methodology in some of its products.
The group has said it is “upgrading” its investment policy by embedding ESG characteristics on corporate bond and emerging market ETFs and has explicitly mentioned the ESG risk/return profile of securities must be considered in its documentation.
This applies to Invesco GBP Corporate Bond ESG UCITS ETF, Invesco USD High Yield Corporate Bond ESG UCITS ETF and Invesco MSCI Emerging Markets ESG Universal Screened UCITS ET.
Invesco is also applying exclusion criteria to Invesco USD High Yield Corporate Bond ESG UCITS ETF, restricting investment securities with business activities including those relating to alcohol, gambling, fossil fuels, nuclear power and more.
Meanwhile, for a number of corporate bond ETFs, Invesco is updating the exclusion criteria to remove securities without an MSCI ESG Rating or MSCI Impact Score, as well as those with an MSCI ESG Rating below BB.
This affects Invesco USD IG Corporate Bond ESG UCITS ETF, Invesco EUR IG Corporate Bond ESG UCITS ETF, and Invesco GBP Corporate Bond ESG UCITS ETF.
It is also changing the reference index for these funds to the ESG equivalent.
The changes will take effect on 30 November.