BetaShares has launched a new ethical ETF for Australian equities.
The BetaShares Australian Sustainability Leaders ETF (ASX: FAIR) “provides exposure to a diversified portfolio of Australian companies that have been screened to preference companies engaged in sustainable business activities and to avoid companies engaged in activities deemed inconsistent with responsible investment considerations,” BetaShares said.
FAIR’s launch is BetaShares’ second sustainability-themed ETF – in January, BetaShares launched the Global Sustainability Leaders ETF (ASX: ETHI) in January 2017, which provides access to a portfolio of global companies (ex-Australia) which are similarly ethically-responsible and leaders in sustainability. Since its launch in January, ETHI has gathered approximately $120 million in assets making it the largest ethical ETF in Australia.
“Given the success we have had with ETHI, the launch of FAIR was a natural progression,” said Alex Vynokur, BetasShares managing director. “We have had significant demand from clients for a ‘true-to-label’ sustainable product for Australian equities. For example, due to the impact of the broad-ranging methodology used by FAIR, its portfolio excludes the majority of mining stocks, including BHP and RIO, as well as the big four banks.”
FAIR uses an anti-fossil fuel screen, and also screens out companies that pose significant environmental social and governance risks, including gambling, tobacco, armaments, uranium and nuclear energy, destruction of valuable environments, animal cruelty, chemicals of concern, mandatory detention of asylum seekers, alcohol, junk foods, pornography, human rights and supply chain concerns, and payday lending.
FAIR also introduces a gender diversity screen, requiring a “requisite level” of gender diversity at the board level. FAIR’s methodology also preferences companies classified as “Sustainability Leaders” due to their involvement in sustainable business activities. Such activities include: renewable energy, water efficiency, recycling, waste remediation and re-use of materials, education, healthcare, animal health, healthy foods and nutrition products, and green star rated buildings, amongst others.
“The launch of FAIR illustrates BetaShares’ commitment to providing cost-effective tools for those investors focused on responsible investment,” Vynokur said. “We expect to continue to grow our presence in this space with the launch of additional products in the future.”