How can Ethos ESG certify a mutual fund or ETF as carbon-neutral?
With the ever-increasing urgency of addressing climate change, mutual funds and ETFs have an important role in helping to finance the transition to a sustainable economy.
Ethos ESG's carbon neutral certification program defines carbon neutral as a net total of zero tons CO2 emissions or negative CO2 emissions for a specified period of time. Ethos calculates a funds net emissions as the funds total Carbon Footprint (Scope 1 and 2 emissions) minus its total carbon offsets:Net Emissions = certified Carbon Footprint - certified Carbon Offset
Through the certification, Ethos performs an independent analysis of a funds carbon footprint and carbon credits (offsets) to verify whether the fund is carbon neutral during a specified period. The carbon footprint consists of Scope 1 and Scope 2 emissions of every holding of the fund. Carbon credits require proof of purchase from an approved carbon credit provider such as Grassroots Carbon.
This program was developed in collaboration with AXS Change Finance whose CHGX US Large Cap Fossil Fuel Free ETF is the first fund to have gone through this certification process.
If you or your clients want to take an additional step of verifying that your investments are carbon neutral, use independently-certified information such as Ethos. You can find certified carbon neutral funds and top-rated funds for Climate Action on the Ethos platform.
If you manage a mutual fund, ETF, or other investment product and are interested in becoming certified as carbon neutral, reach out to Ethos at support@ethosESG.com.