Invesco Solar Energy UCITS ETF

Sustainable, Responsible &/or ESG Policy:

This Fund promotes environmental and/or social characteristics but does not have as its objective sustainable investment, however the Fund intends to make sustainable investments. The environmental and/or social characteristics promoted by the Fund are to gain exposure to the global solar energy equity sector by investing in companies that derive significant revenue from solar business activities. The Fund achieves this by tracking the Reference Index, which has a methodology that is consistent with attaining the environmental and social characteristics promoted by the Fund.

Through a combination of the exclusion criteria detailed in the methodology of the Reference Index and the qualitative assessment and/or engagement of Invesco’s ESG team, it is ensured that investee companies follow good governance practices. The Fund takes into account some of the PAI indicators defined in Table 1 of Annex I of the RTS and ensures alignment with the OECD guidelines and UNGP, thereby ensuring that the sustainable investments do not cause any significant harm to environmental and/or social objectives.

A minimum of 90% of the Fund’s NAV will be selected according to the binding elements of the investment strategy. Up to 10% of the Fund’s NAV may not be aligned with the environmental and/or social characteristics of the Fund, this portion of the Fund may be invested in financial derivative instruments for hedging and/or efficient portfolio management purposes and cash for ancillary liquidity purposes. A minimum of 90% of the Fund’s NAV will be in sustainable investments.

Process:

The ETF tracks the MAC Global Solar Energy Index, a thematic index which is designed to reflect the performance of the global solar energy equity sector and includes companies who derive significant revenue (as explained below) from solar business activities. 

The Reference Index is further described below but only represents an extract of information available from public sources and none of the Directors, the Manager, S&P DJI Netherlands B.V. ("S&P"), MAC Indexing, LLC (“MAC”) or such other successor sponsor to the Reference Index nor the Investment Manager take any responsibility for the accuracy or completeness of such information.

S&P is responsible for decisions regarding the composition of the Reference Index and S&P defines the index universe. The index universe is currently comprised of companies whose shares are listed on a primary exchange in any one of the following 26 countries: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Portugal, Singapore, South Korea, Spain, Sweden, Switzerland, Taiwan, the United Kingdom and the United States.

Companies eligible for inclusion in the Reference Index are reviewed quarterly and may be excluded if according to S&P’s exclusionary criteria:

• the company is engaged in (as defined by S&P) the following business activities: Adult Entertainment, Alcohol, Gambling, Tobacco, Anti-Personnel Mines, Biological and Chemical Weapons, Blinding Laser Weapons, Cluster Munitions, Depleted Uranium, Incendiary Weapons, Military Contracting, Nuclear Weapons, Small Arms, Arctic Drilling, Coal, Nuclear Energy, Oil Sands or Tar Sands, Shale Oil and Gas, Ultra Deep Sea Drilling, Fossil Fuel Power Generation and Extraction; or
• the company has an S&P Governance and Economic Score of less than 5; or
• the company has no S&P Governance and Economic Score coverage. If the company is not covered from a data availability perspective to test for exclusionary business activities, then the security shall be eligible for inclusion in the Reference Index subject to the below further eligibility criteria.

Further information on the business activity descriptions and applicable thresholds can be found on the S&P website.

Based on the Reference Index universe, S&P is responsible for determining if a company is eligible for inclusion in the Reference Index if it derives significant revenue from the following business segments of the solar industry: solar power equipment producers including ancillary or enabling products such as tracking systems, inverters, batteries, or other energy storage systems; suppliers of raw materials, components or services to solar producers or developers; companies that produce solar equipment fabrication systems; companies involved in solar power system installation, development, integration, maintenance, or finance; companies that produce hydrogen using solar energy; companies that provide solar-powered charging systems for electric vehicles or other electrical devices; companies selling systems that use solar thermal energy to produce heat or electricity; companies that sell electricity derived from solar power. All the companies eligible for inclusion in the Reference Index are analysed to determine whether solar power is a significant component of a company’s business, from which they derive significant revenue and S&P uses the following approach.

All global publicly-traded companies with any connection to the solar industry are identified by company description database searches and bottom-up industry research of publicly available information and databases. Based on a review of the company’s public filings and company description, as well as other metrics such as EBITDA, net income or earnings if a company does not report solar revenue breakdown, companies that are identified through the initial search are put into groups and given an exposure factor of 0.5 or 1.0 (“Exposure Factor”):

• Pure-Play Group: Companies that generate in excess of two thirds of their revenue from solar related business are considered to have their primary business in the solar industry and are placed in the Pure- Play Group. These are assigned an Exposure Factor of 1.0.
• Medium-Play Group: Companies that operate in multiple industries but have significant exposure to the solar industry — defined as generating less than approximately two thirds but more than approximately one third of their revenue from solar related business — are placed in the Medium-Play Group. These are assigned an Exposure Factor of 0.5.
• Eliminated Group: Companies with marginal exposure to the solar industry — defined as generating less than approximately one third of their revenue from solar related business — are eliminated from consideration as an underlying Index constituent.

The weighting of the Reference Index constituents at the Rebalance Date (as defined below) is determined as follows: 

• The float-adjusted market capitalisation for each security is multiplied by its Exposure Factor (either 1.0 or 0.5).
• The resulting adjusted market capitalisations are used to create a standard market-capitalisation- weighted index.
• If necessary, weights are capped to ensure that, at the Rebalance Date (as defined below), no security in the Reference Index has an individual weighting greater than 10% and that the aggregate weighting of securities in the Reference Index with individual weightings of more than 4.5% is no more than 45.0% of the total Reference Index.
• Additionally, the Reference Index applies an approach to ensure at least 80% of the combined weight of the Reference Index constituents must be represented by companies that derive at least 50% of their revenues from the solar industry. Stocks with less than 50% solar revenue will either not be included in the Reference Index, or have a weight adjustment to the extent necessary to comply with this policy.

In order to be eligible for initial inclusion in the Reference Index, securities must also meet the following criteria as defined by S&P from a liquidity and tradability perspective: 

• Have a listing on a primary exchange in one of the countries listed above; and
• At the point of initial inclusion, have a minimum float-adjusted market capitalisation of at least $250 million at the Data Reference Date (as defined below) preceding each Rebalance Date; and
• At the point of initial inclusion, have an average daily trading volume over the preceding 3 months larger than $750,000 as of the Data Reference Date.
• The minimum threshold for the continued inclusion of a security in the Reference Index at the each Rebalance Date is US$ 125 million of float-adjusted market capitalization and a 3-month average daily trading value of $375,000 as of the Data Reference Date.
• If the above leads to the Reference Index stock count dropping under 20 stocks, the minimum thresholds for initial and continued inclusion shall be relaxed such that the 20-stock minimum can be met by progressively adding otherwise eligible stocks with the highest float-adjusted market capitalisation first.

Capitalised terms used above and not defined herein are defined by the Index Provider. Further information on these terms and the Reference Index methodology can be found on S&P’s website.

Resources, Affiliations & Corporate Strategies:

Investment Stewardship at Invesco

Invesco’s dedicated Investment Stewardship team comprises over 40[1] stewardship specialists who provide expertise and support to investment teams who manage products in line with client objectives, stated investment strategies and applicable regulatory requirements. The team serves as a strategic resource to support, inform and guide Invesco’s investment teams globally on stewardship activities, including corporate governance, proxy voting and engagement, sustainable investing, and thematic investment research. Our client-centric approach is rooted in our commitment to long-term value creation for clients.

We view stewardship as a core responsibility of asset management. It encompasses our duty to act in the best interests of our clients, using our investment expertise and resources to support outcomes aligned with our clients’ objectives. This includes engaging with companies, voting proxies on behalf of clients, contributing to industry dialogue, and transparently reporting on our stewardship activities, all of which is conducted in accordance with applicable regulatory requirements and client commitments. For relevant strategies and clients, it also includes our sustainable investing capabilities.

Our Organizational Structure

The Investment Stewardship team is organized across four pillars to support investment teams across asset classes and geographies:

 Corporate Governance & Advisory

This team provides governance expertise and supports stewardship across global investment teams. The core responsibility of this team is to support investment teams in considering corporate governance factors within their investment process and to contribute to proxy voting decisions in alignment with Invesco’s stewardship principles. The team collaborates with investment teams in conducting corporate governance engagements and actively participates in industry-wide initiatives and regulatory consultations. It includes our proxy operations and voting capabilities, which execute proxy voting across thousands of shareholder meetings annually.

Stewardship Strategy, Operations & Reporting

This team ensures investment stewardship business planning aligns with Invesco’s firm-wide strategy, incorporating the firm’s priorities into our roadmap and project prioritization. It is responsible for strategy execution, operational alignment, and organizational efficiency across the Investment Stewardship department. The team manages global stewardship workflows, policy implementation, external reporting, and communications, while maintaining operational integrity and regulatory compliance.

Investment Stewardship Analytics

This team supports global stewardship through analytics, portfolio screening, and data vendor management. This team ensures investment teams have access to high-quality, decision-useful information. It also maintains data systems to streamline proxy voting and engagement workflows.

Sustainable Investing Services (SIS)

This team provides expertise and insights on environmental and social topics to support investment decision-making by conducting proprietary research and contributing to meeting client objectives for relevant products and strategies. It partners with investment teams, distribution, and clients to support engagement on sustainability topics and to meet strategy and client-specific commitments.

Global Collaboration and Governance

The Investment Stewardship team includes professionals located in North America, Asia Pacific, and EMEA, providing localized support and analysis to our investment teams across the globe. Our stewardship professionals collaborate closely with investment teams, providing support, insights, and analysis while investment teams maintain discretion on portfolio decisions. In addition, Invesco has dedicated specialists within individual investment teams across the globe who are closely connected with the Investment Stewardship team.

Our governance structure enables oversight and accountability through the Investment Stewardship Leadership Committee, comprised of senior members of the firm from various functions. This ensures that our investment teams receive appropriate guidance on stewardship considerations that are relevant to their investment strategies and processes. We also monitor external service and data providers through regular reviews and audits, meet routinely with major vendors to align methodologies and resolve issues, and increasingly automate data controls (timeliness, conformity, completeness and accuracy) for sources used in portfolio monitoring and compliance. Where gaps arise, we work to resolve them and continue to evaluate new data sets and approaches as sustainability‑related data evolves.

[1] Figure as of 31 March 2026. 

SDR Labelling:

Not eligible to use label (out of scope)

SDR Literature:

• Sustainability related disclosure