Move beyond climate-aware
Climate-aware strategies can help investors to reduce greenhouse gas emissions and mitigate the downside risks from climate change. However, it’s important not to ignore the opportunities that are also being created by the move towards a low carbon world.
That’s why we’ve designed the JPM Carbon Transition Global Equity UCITS ETF (JPCT) to provide investors with a core, low tracking error exposure to global equity markets while reducing carbon intensity, mitigating the downside risks from climate change and leaning in to the opportunities presented by the carbon transition.
JPCT - how does the ETF work?
Comprehensive carbon evaluation
JPCT uses a proprietary research framework that aims to determine how well companies are prepared for carbon transition by evaluating their Emissions Management (forward-looking as well as historical), Resource Management (such as electricity, waste and water) and climate-related Risk Management (both physical and reputational risks).
The aim is to provide a comprehensive view of carbon transition across global sectors and regions that takes into account upside as well as downside risks.
The J.P. Morgan approach to carbon transition
Our research framework is used to construct the J.P. Morgan Asset Management Carbon Transition Global Equity Index, a proprietary benchmark that leans in to companies that are best prepared, and away from companies that are most exposed, to carbon transition. The index is also aligned with the European Union’s Climate Transition Benchmark standards for sustainable products.
By closely tracking our carbon transition index, JPCT aims to provide similar regional, sector and return characteristics to a traditional global equity benchmark, while reducing carbon intensity1 by at least 30% and targeting year-on-year self-decarbonisation of at least 7% on average compared to the Investable Universe (MSCI World Index). The result is a fund that aims to insulate investors from the risks of climate change and seize the investment opportunities made possible by the transition to a low carbon world.
1 Greenhouse gas emissions divided by enterprise value including cash