Nuveen on Friday launched an actively managed exchange-traded fund focused on the global economy's transition to net-zero carbon emissions, a strategy it believes will likely find interest among institutional investors.
The Nuveen Global Net Zero Transition ETF was launched on Nasdaq with the ticker NTZG, a Nuveen spokeswoman said. In seeking to align with the goals of the Paris Agreement, an international treaty on climate change, the ETF will invest in stocks in three categories: climate leaders, companies providing disruptive technology that significantly mitigates climate risk and high-carbon emitters, she said.
"We expect significant interest in the strategy given the number of net-zero pledges among the institutional investor cohort," the spokeswoman said.
Climate leaders are companies that have committed to carbon-reduction plans that are validated as "Paris-aligned" as well as companies that have "a credible intention to reducing carbon," Nuveen said in a news release Friday. High-carbon emitters were defined as companies for which a reduction will translate to "a meaningful contribution to real-world emissions decline," the news release said.
While net-zero started as a concept for country-level climate commitments, it is now becoming a benchmark for companies seeking to signal their intentions to swiftly decarbonize, the release said.
"Through our engagement process, we will seek to decarbonize the portfolio at a rate faster than that of the market to achieve net-zero carbon ahead of the Paris Agreement 2050 deadline," said Jordan Farris, head of ETF product at Nuveen, in the release. "Importantly, the fund serves as an effective voice for investors who are concerned about climate issues and want to drive change through their investments."
The new fund brings the total number of funds in Nuveen's ETF suite to 19, the spokeswoman said. The other 18 funds accounted for $7.9 billion in assets under management as of May 31, she said.
Nuveen, the investment manager of TIAA, had $1.2 trillion in assets under management as of March 31.