Carbon Stocks Watchlist

Carboncredits.com works with partners and affiliates to curate the best possible list of companies in the carbon sector. This is a list of high quality companies that have huge potential for growth.

Carbon Streaming Corporation (NETZ.NE)

Carbon Streaming Corporation is a royalty-type company focused on growing a portfolio of high-quality carbon credit streams. By providing capital to fund carbon credit projects, NETZ earns the right to receive all or a fixed portion of all future carbon credits generated by said projects. Revenue can then be derived from the sale of these carbon credits. Though a higher risk investment, NETZ provides excellent exposure to the growth of the carbon markets.

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iPath Series B Carbon ETN
(GRN)

The iPath Series B Carbon ETN tracks the Barclays Global Carbon II TR USD Index, which is almost entirely comprised of EU ETS carbon credit futures. As a result, this ETN will closely follow the price performance of EU ETS carbon credits, providing good exposure to the growth of the carbon markets, though with greater risk and volatility.

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iShares MSCI ACWI Low Carbon Target ETF (CRBN)

The iShares MSCI ACWI Low Carbon Target ETF tracks the index of the same name, and contains holdings comprised of over 1,000 low-carbon companies around the world. Top holdings are heavily weighted towards U.S. stocks and include Apple, Microsoft, and Amazon. While it’s low risk thanks to its broad diversification, it provides less exposure to the growth of the carbon markets in return. Similar to, but much larger than, LOWC which is managed by a different firm.

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KraneShares California Carbon Allowance ETF (KCCA)

The KraneShares California Carbon Allowance ETF provides direct exposure to the California Carbon Allowances that trade under California’s cap-and-trade program. As a result, this ETF will closely follow the price performance of California’s CCA carbon credits, providing good exposure to the growth of the carbon markets, though with greater risk and volatility.

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KraneShares European Carbon Allowance ETF (KEUA)

The KraneShares European Carbon Allowance ETF provides direct exposure to the European Union Allowances that trade under the EU’s Emissions Trading Scheme. As a result, this ETF will closely follow the price performance of EU ETS carbon credits, providing good exposure to the growth of the carbon markets, though with greater risk and volatility.

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KraneShares Global Carbon ETF
(KRBN)

The KraneShares Global Carbon ETF provides exposure to the EU ETS carbon credits, California’s CCA carbon credits, and the RGGI carbon credits of the northeastern United States. Though current portfolio weighting heavily favours European Union Allowances, this ETF does cover all three major compliance markets, providing good exposure to the growth of the carbon markets with less risk and volatility than the other carbon credit futures ETFs.

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BlackRock U.S. Carbon Transition Readiness ETF (LCTU)

The BlackRock U.S. Carbon Transition Readiness ETF is comprised of mid-to-large-cap U.S. companies that are considered to be better positioned to benefit from the transition to a low-carbon economy. With over 300 holdings in its portfolio, this ETF won’t provide as much direct exposure to the growth of the carbon markets but will provide more long-term stability thanks to its diversified holdings.

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BlackRock World ex U.S. Carbon Transition Readiness ETF (LCTD)

The BlackRock World ex U.S. Carbon Transition Readiness ETF is comprised of mid-to-large-cap global companies that are considered to be better positioned to benefit from the transition to a low-carbon economy. With over 300 holdings in its portfolio, this ETF won’t provide as much direct exposure to the growth of the carbon markets but will provide more long-term stability thanks to its diversified holdings.

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SPDR MSCI ACWI Climate Paris Aligned ETF (NZAC)

The SPDR MSCI ACWI Climate Paris Aligned ETF (previously called SPDR MSCI ACWI Low Carbon Target ETF LOWC) tracks the index of the same name, and contains holdings comprised of over 1,000 low-carbon companies around the world. Top holdings are heavily weighted towards U.S. stocks and include Apple, Microsoft, and Amazon. While it’s low risk thanks to its broad diversification, it provides less exposure to the growth of the carbon markets in return. Similar to, but much smaller than, CRBN which is managed by a different firm. Learn More

VanEck Low Carbon Energy ETF
(SMOG)

The VanEck Low Carbon Energy ETF is a green fund that tracks the MVIS Global Low Carbon Energy Index, and its holdings are comprised of clean energy companies. These components include renewable energy companies, electric vehicle companies, battery tech companies, and so on. With just over 70 holdings, this ETF is less diversified than most low-carbon funds but provides more targeted exposure to the growth of the carbon markets in return.

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SPDR S&P 500 Fossil Fuel Reserves Free ETF (SPYX)

The SPDR S&P 500 Fossil Fuel Reserves Free ETF tracks the S&P 500 Index but doesn’t hold any of the companies in the S&P 500 that own fossil fuel reserves. That’s just 11 companies out of 500, so this ETF will still closely mimic the performance of the S&P 500 Index, but with a lower carbon footprint. This ETF would serve as an excellent replacement in any portfolio that already holds a fund or other product linked to the S&P 500.

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iShares Global Green Bond ETF
(BGRN)

The iShares Global Green Bond ETF follows an index comprised of investment-grade green bonds issued to fund environmental projects around the world. With over 600 holdings primarily comprised of sovereign and other government-related debt, BGRN can add green exposure to fixed income portfolios.

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VanEck Vectors ETF Trust – VanEck Vectors Green Bond ETF (GRNB)

The VanEck Vectors ETF Trust – VanEck Vectors Green Bond ETF tracks the S&P Green Bond U.S. Dollar Select Index, which is comprised of U.S. dollar-denominated bonds issued to fund environmental projects around the world. With nearly 300 holdings largely comprised of sovereign and other government-related debt, GRNB can add green exposure to fixed income portfolios.

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Hanetf ETC Securities PLC Spark
(CO2.L)

The SparkChange Physical Carbon EUA ETC provides direct exposure to the European Union Allowances that trade under the EU’s Emissions Trading Scheme. Unlike most of the other exchange-traded products that are also tied to EUAs, CO2.L directly purchases and holds EUAs instead of the futures. This means that CO2.L theoretically tracks the price performance of EUAs even more closely than its peers, before taking expense ratios into account.

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Ninepoint Carbon Credit ETF
(CBON.NE / CBON.U)

For Canadian investors looking for something with more balanced exposure to the compliance carbon markets instead of just the E.U.’s Emissions Trading System like KRBN, CBON is a good choice.

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Horizons Carbon Credits ETF
(CARB)

Horizon’s Carbon Credits ETF (CARB.TSX) is the first carbon-credit-related investment product to list on the Canadian markets. A passive fund based on the Horizons Carbon Credits Rolling Futures Index, CARB is comprised solely of European Carbon Allowance (EUA) futures, with contracts rolled forward as they expire.

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