Activist investor Engine No. 1, which rose to ESG investment fame last year in its successful battle to win seats on Exxon’s board, announced today the launch of the Engine No. 1 Transform Climate ETF (Ticker: NETZ), a new actively managed fund aiming to provide investors with exposure to companies that will drive and benefit from the energy transition.
Rather than focusing on companies in low emissions sectors, the new ETF will invest across multiple industries, including transportation, energy, and agriculture, in companies identified as having a strategy to create value while working toward net zero. NETZ will leverage Engine No. 1’s Total Value Framework, its data-driven approach linking companies’ ESG impacts to their valuation.
Engine No. 1. Founder Chris James said:
“While most climate-focused funds avoid so-called ‘brown’ legacy companies, we believe there is no way to decarbonize the planet without these companies transforming, and there is no time to lose. Fewer than 200 companies account for more than 80% of corporate industrial greenhouse gas emissions. There is no path to net zero that doesn’t go directly through those companies. Solving climate change requires the largest investment in capital that the world has ever seen, giving investors the opportunity to play a meaningful and profitable role in transforming companies while also greening the planet.”
Currently, the largest holding in the fund is General Motors. Engine No. 1 announced in October that it had invested in GM, lauding the company’s leadership position in the automotive industry-wide transformation to battery electric vehicles, and calling GM’s vision to go all-electric by 2035 “one of the largest transformations in the history of the auto industry.” Other top investments in the fund include Deere, Occidental and Visteon.
Yasmin Dahya Bilger, Head of ETFs at Engine No. 1., said:
“As active owners, our goal is to drive transformation at the companies that need it most, including some of the world’s most polluting companies. As investors, we can’t just invest in young tech companies that aim to tackle climate change over a longer time horizon, we need to own and engage with the companies whose transformation will drive change now at scale. Doing so strengthens communities, creates green jobs in the United States, and better serves customers by localizing industry.”