Managed by Thorsten Paarmann and Alexander Uhlmann in Frankfurt, the resulting large-cap blended fund will provide equity market exposure that meets Article 8 of the Sustainable Finance Disclosure Regulation (SFDR). The EU rules came into force in March requiring asset managers to label their funds under new more stringent sustainability classifications.

Invesco's newly-labelled fund will exclude around 40 per cent of ESG laggards as well as stocks engaged in controversial activities, the group said. Its approach will also apply best-in-class screening to highlight energy transition measures for the stocks making the most progress in this area.

“A focus on greenhouse gas intensity reduction relative to the benchmark also means the fund has a greener footprint and reduces the risk of stranded assets, such as pure-play energy stocks,” the firm said.