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Invesco Dorsey Wright IndustrialsMomtETF PRN Sustainability

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Sustainability Analysis

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Sustainability Summary

Invesco Dorsey Wright IndustrialsMomtETF has a number of attributes that may meet the expectations of sustainability-focused investors, despite some issues worthy of attention.

Invesco Dorsey Wright IndustrialsMomtETF's holdings are exposed to average levels of ESG risk relative to those of its peers in the Industrials Sector Equity category, thus earning it an average Morningstar Sustainability Rating of 3 globes. Competing funds in the category with ratings of 4 or 5 globes have less ESG risk in their holdings. Unlike impact, which measures positive environmental and societal outcomes attributable to an investment, ESG risk reflects the degree to which investments could be affected by material ESG issues, including climate change, biodiversity, product safety, community relations, data privacy and security, bribery and corruption, and corporate governance.

Currently, the fund's involvement in fossil fuels is negligible, and compares favorably with 9.1% for its average peer. No companies held by Invesco Dorsey Wright IndustrialsMomtETF are recognized as being involved in controversies at a high or severe level. From bribery and corruption to workplace discrimination and environmental incidents, controversies are incidents that have a negative impact on stakeholders or the environment, which create some degree of financial risk for the company. Severe and high controversies can have significant financial repercussions, ranging from legal penalties to consumer boycotts. In addition, they can damage the reputation of both companies themselves and their shareholders.

One potential issue for a sustainability-focused investor is that Invesco Dorsey Wright IndustrialsMomtETF doesn’t have an ESG-focused mandate. Funds with an ESG-focused mandate would have a higher probability to drive positive ESG outcomes.

Invesco Dorsey Wright IndustrialsMomtETF has a 12-month asset-weighted Carbon Risk Score of 15.1. This is situated at the lower end of the medium carbon risk band, suggesting that its portfolio holdings are not among the worst-positioned to transition to a low-carbon economy, but they are not among the best-positioned either. Investors concerned about the transition risks may prefer to consider funds with negligible or low carbon risk. Funds with a lower carbon risk classification may be more favored by investors concerned about transition risks, as such funds often tilt toward companies that operate in sectors less exposed to the transition (for example, healthcare and IT) or companies in more carbon-intensive sectors (for example, materials and utilities) that consider climate change in their business strategy, and therefore are positively aligned with the transition.

ESG Commitment Level Asset Manager