COP26 boosts Top ESG ETFs of the week

This week, Carbon ETFs and Hydrogen ETFs make it to the top ESG ETF list in Europe and North America. Below we explain why these ESG ETFs made it to the top for the week of November 8 to 12th, 2021.

Carbon ETFs emit gains during peak COP26 talks

The price of EU carbon dioxide allowances (EUAs) under the EU Emissions Trading System (ETS) closed at €63.27/mt on November 12th (Dec 21 Contract), the last official day the UN Climate Change Conference COP26. Figures were up 11% from Nov 1st, the first official day of the Summit, ICE data show.

Traders and market leaders were expecting talks that would favor higher carbon prices to reduce emissions from coal and oil consumption and encourage industries to switch to clean energy technologies such as solar, wind and hydrogen. The anticipation led many investors to bet on the price of carbon rising, with the impending need to mitigate its output from governments.

ETFs with exposure to EUAs futures rose accordingly with KraneShares Global Carbon ETF (KRBN) and WisdomTree Carbon (CARP) gaining 5% last week.

COP26 clean hydrogen pledges lift Hydrogen stocks

Hydrogen ETFs were among the top performing ESG funds last week with VanEck Vectors Hydrogen Economy UCITS ETF, The Defiance Next Gen H2 ETF and Horizons Global Hydrogen Index ETF gaining +5.44%, +4.96% and +4.63% respectively.

Hydrogen stocks have gained traction during COP26 talks after several nations and companies pledged to increase production of blue and green hydrogen (hydrogen with less or no carbon footprint) as a mean to combat climate change.

Pledges across demand, supply and financial or technical support were made by 28 companies representing different sectors from mining to energy, vehicle and equipment manufacturers, and financial services. The pledges equate to 25% of the decarbonization potential for hydrogen by 2030, as estimated by the Hydrogen Council.

Scotland also chipped in, by reconfirming its commitment to delivering £100 million of funding to implement its 5-GW hydrogen policy, which it said could meet 15% of the country's energy needs by 2030. "It is our ambition for Scotland to become a leading hydrogen nation," Scottish Cabinet Secretary for Net Zero, Energy and Transport Michael Matheson said at the COP26 summit in Glasgow on November 11.

Top 10 ESG ETFs of the week: Carbon ETFs, Hydrogen ETFs and Clean Energy ETFs

• KraneShares Global Carbon ETF (KRBN): +5.88%
• VanEck Vectors Hydrogen Economy UCITS ETF (XLON:HDRO): +5.44%
• WisdomTree Carbon (CARP): +5.38%
• HANetf AuAg ESG Gold Mining UCITS ETF (ZSGO): +5.04%
• The Defiance Next Gen H2 ETF (ARCX:HDRO): +4.96%
• Horizons Global Hydrogen Index ETF (XTSE:HYDR): +4.63%
• HANetf iClima Distributed Renewable Energy UCITS ETF (DGEP): +4.53%
• Invesco WilderHill Clean Energy ETF (PWYF): +4.41%
• UBS ETF – MSCI China ESG Universal UCITS ETF (CNESG): +3.66%
• HANetf S&P Global Clean Energy Select HANzero UCITS ETF (ZERP): +3.33%

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