Firm’s sustainable core equity strategy now available across all major equity markets
CHICAGO–(BUSINESS WIRE)–Northern Trust Asset Management’s FlexShares® Exchange Traded Funds announced today the launch of a new Environmental, Social and Governance (ESG)* ETF focused on climate with exposure to emerging markets: the FlexShares ESG & Climate Emerging Markets Core Index Fund (NYSE: FEEM). This fund builds on FlexShares’ existing climate suite introduced in September 2021, which currently includes US large cap equities, developed markets ex-US equities, and two fixed-income ETFs.
The FEEM fund will align with the broader suite’s strategy, which seeks to help investors improve their portfolio’s overall ESG score and reduce carbon risk while maintaining core equity exposure. The full suite utilizes the Northern Trust ESG Vector Score** as well as a carbon risk rating in an effort to hedge ESG-related risks and capitalize on sustainable opportunities.
The ESG Vector Score methodology, developed by Northern Trust Asset Management (NTAM), seeks to identify ESG-related business issues most likely to impact a company’s financial performance and a portfolio’s investment return. This is combined with a special focus on carbon risk. In partnership with Institutional Shareholder Services (ISS), each company is examined using a carbon risk rating methodology to determine its current carbon emissions, its efforts to reduce its carbon footprint, and its potential exposure to carbon-risk relative to other companies in its industry. The fund targets a reduction in aggregate carbon emissions and carbon reserves relative to its parent index, while also targeting an overall improvement in its carbon risk rating.
A Diverse Collection Of Sustainability Products
“The addition of the FlexShares ESG & Climate Emerging Markets Core Index Fund will complement FlexShares’ existing climate funds, providing investors a diverse set of core sustainability products they can use for exposure across the globe,” said Crystal McClenthen, Head of Product Strategy, Funds and Managed Accounts at NTAM. “The combination of our ESG Vector Score and carbon risk rating creates a transparent and consistent approach to ESG measurement, which is particularly important when it comes to identifying opportunities in emerging markets.”
FlexShares’ climate suite leverages NTAM’s 30+ years of experience in sustainable investing and over $130 billion in AUM in sustainable strategies. With the addition of FEEM, FlexShares now offers seven ESG and/or climate-focused ETFs in its US lineup.
Darek Wojnar, Head of Funds and Managed Accounts for NTAM, added: “Our central focus at FlexShares is to meet investor goals with innovative solutions, and increasingly that means supporting clients’ sustainability objectives. We believe our deep sustainability expertise and proprietary quantitative models will help investors gain core exposure to global markets while benefitting from the transition to a low-carbon economy.”
* ESG investing is defined as utilizing environmental, social, and governance (ESG) criteria as a set of standards for a company’s operations that socially conscious investors use to screen potential investments.
** The Northern Trust ESG Vector Score is designed to rank companies based on their management of and exposure to material ESG metrics. The Score was designed to align with the Sustainability Accounting Standards Board (SASB) Standards. The SASB Standards were designed for investors and focus on only financially material issues based on the industry in which the company operates. Based on that structure, the ESG Vector Score is a combination of individual ESG indicators, adjusted for industry membership. Click here to learn more.
FlexShares Exchange Traded Funds are designed to pursue specific investment goals across both passive and active strategies. FlexShares offers differentiated ETF strategies that can improve and simplify the investment decision process for the long-term investor. Please visit their website or connect with them on their LinkedIn page.
About Northern Trust Asset Management
Northern Trust Asset Management is a global investment manager that helps investors navigate changing market environments, so they can confidently realize their long-term objectives. Entrusted with US$1.3 trillion of investor assets as of December 31, 2021, they understand that investing ultimately serves a greater purpose and believe investors should be compensated for the risks they take — in all market environments and any investment strategy. That’s why they combine robust capital markets research, expert portfolio construction and comprehensive risk management to craft innovative and efficient solutions that deliver targeted investment outcomes. As engaged contributors to their communities, they consider it a great privilege to serve their investors and their communities with integrity, respect, and transparency.
Northern Trust Asset Management is composed of Northern Trust Investments, Inc., Northern Trust Global Investments Limited, Northern Trust Fund Managers (Ireland) Limited, Northern Trust Global Investments Japan, K.K., NT Global Advisors, Inc., 50 South Capital Advisors, LLC, Belvedere Advisors LLC and investment personnel of The Northern Trust Company of Hong Kong Limited and The Northern Trust Company.
About Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of wealth management, asset servicing, asset management and banking to corporations, institutions, affluent families and individuals. Founded in Chicago in 1889, Northern Trust has a global presence with offices in 22 U.S. states and Washington, D.C., and across 23 locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of December 31, 2021, Northern Trust had assets under custody/administration of US$16.2 trillion, and assets under management of US$1.6 trillion. For more than 130 years, Northern Trust has earned distinction as an industry leader for exceptional service, financial expertise, integrity and innovation. Please visit their website (here) or follow them on Twitter.