UBS Asset Management has launched an ETF which aims to provide an alternative commodities exposure which integrates ecological and social risks. There is currently no standard methodology across the industry to assess commodities across their life cycle from an ESG perspective. In order to assess the ESG risks and opportunities of various commodities, UBS has partnered with the sustainable investment research specialist rfu, which advises clients with portfolios totalling approximately EUR 30bn.
The UBS CMCI Commodity Transition SF UCITS ETF tracks an index that re-weights the underlying commodities based on their respective ecological and social risks and opportunities. This new UBS CMCI Sustainability Transition Index also uses the long-standing UBS CMCI commodity futures rolling concept which helps to mitigate negative roll yield and has a live track record in excess of 15 years.
The rfu methodology evaluates the relevant impact factors of more than 30 commodities across energy, agriculture and metals. The model considers:
- social and environmental risks from a production and utilization perspective at the commodity level
- a commodity’s country production mix through rfu’s sovereign rating model
The new ETF is aligned with SFDR Article 6; it is not managed in line with specific sustainability related goals, but it does consider relevant ESG risks as part of its ESG integration strategy.
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