(28 February 2022 – Europe) The United Nations (UN) supported green exchange traded investment fund (ETF) MSCI Global Climate Select (NTZO) may not get off the ground following its recent launch after major financial institutions failed to commit promised seed funding.
The fund has only accumulated less than US$2 million and could be wound down as soon as the end of Q1 2022 without further investment after its launch during the Glasgow climate summit in Q4 2022. The ETF was created by Impact Shares and Global Investors for Sustainable Development (GISD), a group of 30 global corporates that launched in Q4 2019 to support investment in the UN’s sustainable development goals. BofA (Bank of America), Citi, Santander and many other GISD members pledged to provide seed funding to NTZO but have stopped short of doing so until other investors commit.
BofA and Citi pledged up to US$50 million and $12.5 million respectively for the ETF on the understanding that their investments could not account for more than 25 percent of the fund. Santander pledged US$50 million but could not have more than five percent noting that because of the ETF’s minor size Banks could not extend maximum dollar commitments without exceeding pledged percentages.
“It is a classic case of everyone just going through the motions. There needs to be some accountability. We care about global warming and we just resent the facade that the GISD represents to us” commented former Credit Suisse bankers Sudip Thakor and Jim Healy who are involved with the NTZO fund.