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 JPMorgan Carbon Transition U.S. Equity ETF (JCTR) to provide investors with a core, low tracking error exposure to global equity markets while reducing carbon intensity and leaning in to the opportunities presented by carbon transition.
Comprehensive carbon evaluation
JCTR 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 U.S. 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 compliant with the European Union’s Climate Transition Benchmark standards for sustainable products.
By closely tracking our carbon transition index, JCTR aims to provide similar regional, sector and return characteristics to a traditional global equity benchmark, while reducing carbon intensity by at least 30% and targeting year-on-year self-decarbonisation of at least 7%. 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.