Facebook to be removed from the BetaShares Global Sustainability Leaders ETF (ASX: ETHI)

The Responsible Investment Committee (RIC) of the BetaShares Global Sustainability Leaders ETF (ASX code: ETHI) has, last Friday, determined that Facebook will be removed from the index that ETHI is designed to track, and accordingly it will be removed from the ETF.

The RIC of the Fund is responsible for determining the list of securities that pass the responsible investment screens outlined in the index methodology. The RIC provides an oversight role for what is one of the most rigorous index screening processes in the industry, which allows it to take prompt action, where warranted, in cases where serious responsible investment concerns are raised in regard to any current index constituents.

Why is Facebook being removed?

Facebook has historically qualified for inclusion in the Fund’s index on the basis of its strong global leadership on carbon emission metrics (which are nearly 80% better than its industry peers) as well as its responsible advertising and other policies. However the company has in recent times been the subject of a number of controversies and reputational issues, which the RIC has been monitoring on an ongoing basis. These issues include (but have not been limited to) the recent scandal involving data analysis company Cambridge Analytica’s use of personal data from 50 million Facebook users who did not agree to the use of their data.

The combination of the recent serious data breach (which has also raised governance-related issues given that it appears the company was aware of the breach as far back as 2015) with other previously identified issues has caused the RIC to determine that Facebook is no longer eligible for continued inclusion in the index (and, as a consequence, in the ETF). We view the removal of Facebook from the Fund’s index as consistent with investor’s expectations of ETHI as a ‘true to label’ ethical investment fund.

Learn more about the BetaShares Sustainability Leaders ETFs

With ~$170 million in funds under management, ETHI is the largest global ethical ETF traded on the Australian Securities Exchange.

In addition to ETHI, BetaShares has recently launched the Australian Sustainability Leaders ETF (ASX: FAIR), which provides a cost-effective, transparent option for “true to label” ethical investment into Australian shares. Since its inception 4 months ago, FAIR has grown rapidly to ~$95 million in funds under management.

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