Investment Premiere: Ecology and Economy Smartly Combined

Most sustainable investors are not naive (anymore). Of course, ESG-themed characteristics are important, however, also the financial returns should be valued. Those facts have been neither fully reflected by an appropriate index yet nor by an investable product. Switzerland's first ESG-linked ETP+ enables investors to put both into their portfolios: sustainable leadership and a bright business outlook.

No doubt: For businesses and investors alike, sustainability and the responsible use of resources remain key issues just as much as the returns on their investments. In this context there is a need for approaches that combine the two elements of ecology and economy. As an innovative player in the ESG ratings and data sector, Switzerland-based Global Green Xchange AG offers not only solutions relating to ESG ratings and raw data, but also practical index and portfolio solutions linked to sustainability for asset managers, family offices and institutional investors. The GGX research team has launched the GGX Sustainable Dynamic Leaders Index family as a high-performance showcase combining ESG parameters and economic factors in a single index.

ESG rating as a criterion for inclusion

The stocks for this index are initially selected on the basis of the GGX ESG rating, an innovative rating that allows the sustainability of companies to be quantified transparently and verifiably. The effective achievements of a company in individual reporting periods are compared and their dynamic development (improved, the same, worse) is scored from 0 to 10. To make it into the selection for the index, a rating of 4.0 or better is essential. The score boundaries are also clearly labelled, giving investors the greatest possible precision in interpretation. An important fact here: GGX also rates companies proactively, without receiving any payment or sponsorship from the company being rated. This, too, underlines the neutrality of GGX’s #ESG ratings.

AT A GLANCE: GGX Sustainable Dynamic Leaders Index Europe?

Equally weighted and inclusive dividends

The companies qualifying for the European variant, the GGX Sustainable Dynamic Leaders Europe Index, must have a primary listing in Switzerland, the EU, Great Britain or the other EFTA states (Liechtenstein, Iceland and Norway). The minimum market capitalisation must be one billion euros (or the equivalent). The two sectors of armaments and mining/coal are barred from inclusion in the index. The index members are weighted equally and the net dividend payments are considered in the index performance, favouring investors.

20 sustainable leaders on the silver plate

The following companies are currently included into the GGX Sustainable Dynamic Leaders Index Europe?:

ABB Ltd Global leader in the low-carbon economy transition with improved environmental dynamics, one of the best rated Swiss-headquartered companies by GGX. ASML Holding NV Impressive reporting quality (FY 2021), one of the best performing semiconductor-related stocks within our self determined ESG measures? Banco Santander SA Over average performance in the E, S and G categories within our self determinded measurement.? Barclays PLC Leading ratings in Social and Governance, dense data and very good reporting on a company level. Covestro AG Leading ratings in Social and Governance, E Scores improved? Halma PLC Britain's multi-sector holding, with one of the leading GGX ESG scores.? Informa PLC One of the UK's most dynamic company in regards to becoming a zero waste and net zero carbon business. L Air Liquide SA Very good environmental performance, one of the leading companies in the industrial gas business and generally commodity stocks Lonza Group AG One of the most progressive chemicals and pharma conglomerates, continued efforts to reduce E footprint. Mercedes-Benz Group AG One of the most serious adaptors of environmental topics amongst the leading global car manufacturers; advanced ESG reportings Orsted A/S As special consitutents, ?rsted has been selected as major sustainability impact company. ?rsted drives thru its development, construction and daily operations of off- and onshore wind farms, solar farms, energy storage facilities, renewable hydrogen and green energy plants the World's path to net zero emissions.? Porsche Holding SE Advanced GGX ESG scores, incoming IPO, impressive reporting (2020, 2021), very good performance for a car manufacturer with high sales numbers for their leading electric vehicle (Porsche Taycan) and more incoming projects in the future Sanofi SA Very dense reporting (2021 & 2020), over average permormance in E, S, and G within our self determined ESG measurment? SAP SE Leading ratings in Social and Governance Sartorius AG Best rated DAX-company within our self developed ESG measures Stellantis NV Progressive global car manufacturer with moderate GGX ESG scores who demonstrated one of the most significant transformation of the company’s vehicle offerings. Stellantis is holding of Europe's most issue low- or no-CO2 emission cars (Peugot, Citroen, Opel, Alfa Romeo). Also, improvements with large-emissions brands recognized. Battery electric vehicle sales by 2030, with a 100% BEV sales mix in Europe, and 50% in the U.S. annonced. Swiss RE AG Credible systematic integration of various ESG considerations into corporate (intracompany) behaviour, investment process and Swiss Re's portfolio. Unilever Group Leading ESG score for consumer goods stocks with an dense data reporting.? Vestas Wind A/S Vestas is also part of the Special Constituents in the index. The company plays a significant role thru its on- and offshore wind turbines across globally. Vestas is a major impact enabler towards greener energy. Also, high Governance rating. Vodafone Group PLC Over average performance in the E, S and G categories within our self determinded measurement

Listed and investable

A retrospective view of the last five years shows that the GGX Sustainable Dynamic Leaders Europe Index has not only sparkled with an absolute improvement of around 58% in value, but also achieved a significant outperformance by comparison with similarly themed indices (see chart). It is well known that past performance is no guarantee for the future, but the index concept promises to be well suited going forward as well. Investors have an immediate opportunity to include both ecology and the prospect of attractive returns in their portfolio with Switzerland's first ETP+ on a sustainable index. All the information required for purchasing or trading in the listed financial product (symbol ESGEU) can be found here.

Remarkable, ETP+ uses not only a reputable custodian (SIX SIS) and collateral agent (SIX Repo AG), both based in Switzerland, but also provides for daily independent checks, which serve as key mitigators of the issuer risk. Especially in times of some market volatility, ETP+ exhibit its advantages over conventional Tracker-Certificates.

I'm very glad belonging to the founding fathers of this index and was invited to the listing event, hosted by Leonteq. Great to have ecology and economy smartly combined into a Exchange-Traded Product, listed on Swiss stock exchange. Let's make ESG work!

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Disclaimer: This article does not constitute an offer to sell, a solicitation of an offer to buy, or any recommendation of any security or any other product or service, securities solutions etc. Investors act on thier own risk.