FRANKFURT, Germany (April 20, 2023) — In an effort to provide investors with solutions to decarbonize their portfolios, MarketVector IndexesTM (“MarketVector”) announces today its strategic partnership on sustainable investing strategies with Etho Capital, a financial technology company that aims to align investor profits with a better planet. To further cement their partnership, the firms have co-launched the ETHO MarketVectorTM Global Climate Positive Index (ticker: ETHOI) – an alternative designed to replace broad-based global benchmark indexes with an investable index solution that seeks to deliver net climate benefits rather than just less harm.
The innovative ETHO MarketVectorTM Global Climate Positive Index is designed to empower investors to meet and exceed Net Zero goals today, rather than decades in the future, by investing in a mix of lower carbon and climate solution companies, while maintaining broad sector and geographic diversification, similar to conventional global benchmark indexes.
According to the United Nations’ latest IPCC report and the One Earth UTS model, investors must move much faster to decarbonize their portfolios, with Organisation for Economic Co-operation and Development (OECD)-based investors, such as the U.S., U.K., being charged to transition from Net Zero to Climate Positive before 2040. The ETHO MarketVectorTM Global Climate Positive Index, powered by the index team’s proprietary research and globally regulated index administration, uniquely addresses the challenges associated with accelerating climate solutions within all sectors of the economy. Born from the combined expertise of Etho Capital and MarketVector, this index allows investors to track and invest in companies that are making the most substantial strides toward fully decarbonizing our global economy while still upholding ESG standards.
“We are committed to creating innovative solutions for investors across various sectors, with sustainable indexes being a priority area for MarketVector,” said Steven Schoenfeld, CEO of MarketVector. “We are thrilled to partner with Etho Capital to offer investors access to a unique approach for investing in companies that are making meaningful strides toward achieving global climate goals. Our hope is that the application of the index will help accelerate progress on carbon neutrality and enable investors to align their portfolios with their values,” he continued.
The ETHO MarketVectorTM Global Climate Positive Index is one of the first broadly diversified global index to combine Scope 1-3 climate footprint and avoided emissions calculations to ensure net climate benefits, combining deeper climate analysis with overall ESG bad actor screening. The index is weighted by free-float market capitalization and reviewed on an annual basis and is calculated in USD as a price index a total net return index, and a total gross return index. Capping factors are applied to avoid overweighting of single index components. The selection process takes into account all relevant factors, including energy and resource use efficiency, renewable energy sources, supply chain sustainability, low-carbon design and materials selection, greenhouse gas emissions reduction infrastructure, and production of other innovative climate technology solutions.
“At Etho Capital, we understand that measuring the carbon emissions and social impact risks in investor portfolios is a crucial part of a shrewd investment strategy,” said Amberjae Freeman, CEO of Etho Capital. “The Global Climate Positive Index provides asset owners, asset managers, and other investment professionals, with a benchmark index to measure other global portfolios against. As the old adage states, 'what you can measure, you can manage,' and we are pleased to partner with MarketVector on this innovative index, which can help investors take a huge leap forward – taking Net Zero goals from theoretical to actionable.”
“Our climate crisis is dire, and the latest science makes it clear that we need to do everything we can to reverse the climate damages that are already costing lives and livelihoods,” said Ian Monroe, President and CIO of Etho Capital, who also teaches courses on climate solutions at Stanford University. “We’re excited that our new Climate Positive index can help investors fully decarbonize and shift into solutions and now, not decades in the future, while still maintaining the benefits of overall ESG integration and benchmark-level diversification. The science says Net Zero by 2050 is too little too late, and we hope our Climate Positive index proves investors don’t have to wait.
Detailed information about the index, including methodology details and index data, is available on the MarketVector website.