ImpactAlpha, September 24 – As U.N. Week gets underway in New York, nonprofit investment manager Impact Shares has rolled out a Sustainable Development Goals-aligned exchange traded fund (ETF) on the New York Stock Exchange.
It is the third impact-focused ETF Impact Shares has launched this year. Impact Shares partnered with the Rockefeller Foundation and the U.N. Capital Development Fund—an agency trying to usher capital into the world’s 47 poorest countries––to launch the fund.
The new fund, which is listed with the ticker SDGA, includes shares of companies that have committed to supporting the SDGs, particularly in low-income markets.
Companies are selected for the fund based on four screening criteria: no U.N. exclusionary criteria (i.e. they aren’t selling alcohol or making nuclear weapons); low controversy rating (from Sustainalytics, based on issues like ethics, governance, and social issues); U.N. Global Compact signatory; and ranking based on 70 ESG metrics (like corruption, supply chain monitoring, and working conditions.) A fifth screen gives companies an additional boost based on how much revenue they generate in low-income countries.
“This new Social ETF not only addresses the estimated $2.5 trillion annual funding gap required to achieve SDGs in developing countries. It also provides UNCDF a critical new source of funding to continue its good work helping vulnerable people overcome many of the pressing global challenges that impact livelihoods,” said Rockefeller Foundation’s Saadia Madsbjerg. That source of funding will come from the ETF’s management fee, which will be donated to UNCDF.
Earlier this year, Impact Shares launched two other impact ETFs on the New York Stock Exchange, built around similar partnership models. It launched one in partnership with the NAACP, trading as NACP, built around companies focused on minority empowerment. In August, it launched a women’s empowerment ETF in partnership with the WYCA, which trades under the ticker WOMN.
“The goal is to have a platform that’s a barometer for social prioritization,” Impact Shares’ Ethan Powell told ImpactAlpha in July.