News / Media

KraneShares Launches First US-Listed Global Carbon Offset ETF (NYSE: KSET)

NEW YORK, NY, April 27, 2022 — Krane Funds Advisors, LLC (“KraneShares“), an asset management firm known for its global exchange-traded funds (ETFs) and innovative investment strategies, announced the launch of the KraneShares Global Carbon Offset Strategy ETF (Ticker: KSET) on the New York Stock Exchange today.

KSET offers broad coverage of the voluntary carbon market by tracking carbon offset futures contracts. These futures contracts include nature-based global emission offsets (N-GEOs) and global emission offsets (GEOs), which trade through the CME Group, the world’s largest financial derivatives exchange. KSET will dynamically add additional offset markets as they reach scale.  

According to CME Group, N-GEO futures follow the industry-leading Verified Carbon Standard (VCS) requirements for Agriculture, Forestry, and Other Land Use (AFOLU) projects. Additionally, N-GEOs require certification from the Verra Registry’s stringent Climate Community and Biodiversity (CCB) Standard, which identifies projects that simultaneously address climate change, support local communities and smallholders, and conserve biodiversity. GEOs are offsets that meet Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) criteria from the VCS, Climate Action Reserve, or American Carbon Registry.1

“KSET is a timely expansion of the KraneShares Climate Investment suite, which includes the $1.4bn KraneShares Global Carbon Strategy ETF (KRBN), to now cover both compliance and voluntary carbon markets,” said Luke Oliver, KraneShares Head of Strategy. “KSET’s addition to the suite gives investors holistic access to global decarbonization efforts and continues KraneShares’ leadership in the space.”

“Voluntary carbon markets are a vital tool in the fight against climate change and are increasingly viewed as a cornerstone in global efforts to achieve mid-century net-zero targets,” said Eron Bloomgarden, co-founder of Climate Finance Partners (CLIFI) KSET’s non-discretionary sub-advisor. “Investors can feel confident that the offset credits behind KSET are generated from emission reduction activities that have been third-party verified by leading carbon offset registries.”

What are Carbon offsets?

Carbon offsets are created through emission reductions activities that have been developed and verified to third-party standards.  These offsets are used to mitigate residual and hard-to-abate emissions that corporations, governments, or individuals generate as part of their ongoing activities. The governing bodies tasked with overseeing the verification of carbon offset projects are called carbon offset registries. These registries issue credits for emission-reducing projects such as forest conservation, the creation of wind farms, methane gas capture in a landfill, and renewable and energy efficiency projects. Credits are issued proportionate to the amount of greenhouse gas (GhG) emissions an activity removes, avoids, or reduces. Buyers of offsets should first reduce their own Scope 1, 2, and 3 emissions* and then purchase a corresponding quantity of credits to offset their residual emissions. Entities often utilize offsets as a short-term bridge while they work on implementing longer-term decarbonization measures.

“KSET is the first US-listed ETF to combine the top carbon offset futures markets into a single investable fund2,” said Jonathan Krane, Chief Executive Officer at KraneShares. “We are pleased to offer KSET as a key addition to our growing climate suite.”

For additional information on the KraneShares Global Carbon Offset Strategy ETF (Ticker: KSET), contact your financial advisor or visit kraneshares.com/KSET.

About Krane Funds Advisors, LLC

Krane Funds Advisors, LLC is the investment manager for KraneShares ETFs. KraneShares is a premier platform that develops and delivers differentiated, high-conviction investment strategies to global investors.

Since 2013, KraneShares has become one of the leading China ETF providers. Given China’s importance in addressing the global climate challenge, our Climate Suite is a natural extension of our China focus. KraneShares strives to deliver innovative first-to-market strategies based on strong partnerships and deep investing knowledge. KraneShares helps investors stay current on global market trends and provides meaningful diversification.

Krane Funds Advisors, LLC, is a signatory of the United Nations-supported Principles for Responsible Investing (UN PRI). The firm is majority-owned by China International Capital Corporation (CICC).

About Climate Finance Partners

Climate Finance Partners delivers innovative climate finance solutions and investment products to address capital needs for emerging environmental challenges. CLIFI is led by a team of investment professionals with deep experience in the fields of traditional investment and environmental finance.


*Scope 1 emissions are direct greenhouse (GHG) emissions that occur from sources that are controlled or owned by an organization (e.g., emissions associated with fuel combustion in boilers, furnaces, vehicles). Scope 2 emissions are indirect GHG emissions associated with the purchase of electricity, steam, heat, or cooling. Scope 3 emissions are the result of activities from assets not owned or controlled by the reporting organization, but that the organization indirectly impacts in its value chain.

Citations:

  1. CME Group, “CBL Nature-Based Global Emissions Offset (N-GEO) and CBL Global Emissions Offset (GEO) Futures ‒ Frequently Asked Questions,” Jun 21 2021
  2. Data from Bloomberg as of 4/25/2022