Lion-OCBC Securities Singapore Low Carbon ETF to Make Debut on SGX

OCBC Securities and Lion Global Investors will list Lion-OCBC Securities Singapore Low Carbon ETF on the Singapore Exchange (SGX) on 28 April 2022.

This ETF tracks the iEdge-OCBC Singapore Low Carbon Select 50 Capped Index which is made up of a basket of the top 50 Singapore companies (including Real Estate Investment Trusts and Business Trusts) by free-float market capitalisation with low carbon intensity. The carbon intensity of each of the 50 companies is verified by Sustainalytics, an established investment research firm specialising in environmental, social and governance (ESG) research, ratings and data.

The iEdge-OCBC Singapore Low Carbon Select 50 Capped Index, launched on 14 March this year, was developed by product specialists from across the OCBC Group and the SGX through an exclusionary methodology that removes companies with a heavy involvement in the fossil fuels sector or high carbon emissions.

The Weighted Average Carbon Intensity (WACI) is used to measure the Index's exposure to carbon-intensive companies. It is a calculation of the tonnes of CO2 emitted per US$1 million of company revenue. It then aggregates them using the percentage weight of the holding within the Index. The WACI metric therefore normalises the measurements based on company size - a large company with large carbon emissions, in absolute terms, may have a lower WACI than a smaller company that pollutes less, in absolute terms, but is less efficient in its processes.

Based on data from SGX Index Edge, the iEdge-OCBC Singapore Low Carbon Select 50 Capped Index has outperformed market benchmarks (STI, SIMSCI) on 3-year, 5-year and 10-year time horizons.

Source: Finextra