Funds Group: IndexIQ
Management Company: IndexIQ Advisors LLC
Funds Affected: IQ Candriam ESG International Equity ETF, IQ Candrian ESG US Equity ETF
Principal Sustainable Investment Management Strategies: ESG integration, negative screening (exclusions)
Summary:
Eligible securities across multiple countries or a single country as is the case for the US fund consist of companies meeting environmental, social and corporate governance (ESG) criteria developed by Candriam. The first step in the ESG security selection process combines a sector-specific analysis and ranking of issuer-specific factors, including corporate governance, environmental impact, and labor practices, along with a macro analysis of the issuer’s exposure to global sustainability trends, including climate change, resource depletion, and health and wellness. This sector-specific analysis evaluates companies within the same sector each other, using criteria specific to the particular sector. Except for the excluded activities described below, the ESG security selection process seeks to maintain exposure to all industry sectors of the economy (e.g., financials, industrials, consumer discretionary, consumer staples, materials, health care, energy, utilities and information technology).
The companies with an overall ranking in the top 70% of the eligible universe within each industry sector based on this ESG selection process are captured in the underlying index, unless a company is excluded as a result of the second step in the ESG security selection process. The second step in the ESG security selection process is an exclusionary screen based on any continued and significant non-compliance with the principals within the United Nation’s Global Compact as well as the exclusion of companies engaged in certain businesses beyond minimum thresholds (e.g., companies that operate in countries with oppressive regimes, that operate in adult content, alcohol, armament, gambling, nuclear, and tobacco sectors, or that utilize animal testing or genetic modification in research and development).
Candriam (a New York Life Insurance Company) is a European multi-specialist asset manager that has been engaged in sustainable investments with, since 1996.
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