Data provider Util today unveiled the best and worst equity funds for sustainability.
Invesco Ltd (NYSE:IVZ)'s S&P 500 Equal Weight Utilities ETF was named the worst-performing equity fund for climate action, according to Util's Impact Investment Leaders and Laggards report.
About 81% of the fund’s underlying revenue was found to be negatively exposed to climate risks, the data provider said.
Also ranking bottom of the equity funds for climate action, behind Invesco’s utilities exchange-traded fund, was Fidelity International's MSCI Utilities Index ETF, which was 80% exposed to climate risks.
The John Hancock Multifactor Utilities ETF, ProShares Ultra Utilities, ProFund VP Utilities, The Utilities Select Sector SPDR Fund and Rydex Utilities Fund all had a similar level of exposure.
The worst-performing funds for climate action typically had high exposure to power utilities and oil and gas.
Util analysed more than 6,000 US-domiciled funds, and their underlying holdings, to measure their contribution to the United Nation’s 17 sustainable development goals.
The top-performing equity funds for climate action included the Global X Hydrogen ETF, and Fidelity Clean Energy ETF.
About half of the revenue streams from their underlying holdings contributed positively to the UN’s climate goals, Util said.
Many of the top contributors were moderately exposed to insurance, which can help reduce the financial impact of extreme weather events.
The other best-performing funds for climate action in Util’s top 10 leaders were the Invesco Solar ETF, Global X Solar ETF, KraneShares MSCI China Clean Technology Index ETF, ALPS Clean Energy ETF, iShares US Insurance ETF, Global X Wind Energy ETF, Global X CleanTech ETF and Invesco KBW Property & Casualty Insurance ETF.
Util chief executive Patrick Wood Uribe said: “Only with comprehensive company, industry, and fund data can trade-offs be understood and managed, and positive impact optimised.
“With just eight years remaining to achieve the UN’s 2030 Agenda for Sustainable Development, navigating those trade-offs has never been more urgent.”