Anyone who invests in funds or ETFs that track a sustainable stock market index can make the world a little better. Whether that succeeds, however, depends on which companies are included in the index – and what they actually do for the environment and social justice. When the Hannover Stock Exchange, together with the rating agency ISS ESG, designed the Global Challenges Index (GCX) in 2007, it had exactly that in mind: The index should contain companies that not only refrain from sins of the climate – but also actively improve the world.
The GCX contains 50 companies, mostly from the US and Europe. Your selection is so strict that the Stiftung Warentest index in sustainability awarded the top grade has. Controversial business areas such as nuclear energy, green genetic engineering and armaments are taboo. There are also strict exclusion criteria for coal and oil. Companies also need to do well in terms of environmental and social ratings.
And: You have to make an active contribution to overcoming the social and ecological challenges of our time. These include, for example, the preservation of biodiversity, the supply of drinking water and climate change. In addition to the rating agency, an expert advisory board monitors the index selection: “It ensures that sustainability really plays a role,” says Jörg Weber from Industry service Ecoreporterwho analyzes sustainable investments.
So contains the GCX Companies such as the Hamburg-based wind turbine manufacturer Nordex or the Swiss company Geberit, which use water-saving technology in their sanitary facilities. The largest positions (see graphic) include the US railroad company Union Pacific and the semiconductor manufacturer AMD, which is also active in cloud computing. Compared to conventional storage technologies, this saves resources and CO₂.
Investment expert Weber is certain: The GCX is better “than many other indices that focus on losing industries such as coal, crude oil or gas”. Since it was launched in 2007, the index has given investors around eight percent returns per year. Still, investors should keep in mind that the GCX contains relatively few companies with just 50 companies. An investment in the index can therefore involve a higher risk than with the classic world indices on the floor.
By the way, there is no ETF on the index. However, the investment company Warburg Invest has launched the Global Challenges index fund (ISIN DE000A1T7561). It maps the GCX almost one-to-one. The problem: In contrast to an ETF, the fund has significantly higher costs. Behind Warburg Invest is also the private bank MM Warburg, which was involved in the scandal over so-called cum-ex deals.