Amundi has announced forthcoming changes to its Lyxor-branded European oil and gas industry ETF, including screening based on environmental, social, and governance (ESG) criteria.
Amundi is aiming to classify at least 40% of its ETFs as ESG products by 2025.
Effective 4 July 2023, the $380 million Lyxor STOXX Europe 600 Oil & Gas UCITS ETF (OIL) will shift from tracking the STOXX Europe 600 Oil & Gas Index and will henceforth be linked to the STOXX Europe 600 Energy ESG+ Index.
The fund will replicate its new index directly in contrast to the existing index which is currently being tracked indirectly using swaps.
Following the changes, the ETF will also be renamed to the Amundi STOXX Europe 600 Energy ESG Screened UCITS ETF and will be reclassified from Article 6 to Article 8 under the European Union’s Sustainable Finance Disclosure Regulation (SFDR).
The move is part of Amundi’s broader efforts to restructure at least 40% of its ETF range as socially responsible investment products by 2025.
Methodology
Similar to the outgoing index, the STOXX Europe 600 Energy ESG+ Index is constructed from the STOXX Europe 600 Index universe which comprises 600 of the most liquid, large-, mid-, and small-cap companies across 17 developed market countries in Europe.
The methodology also similarly selects stocks from the starting universe based on their classification within energy-related industries under the Industry Classification Benchmark (ICB) standard.
The index’s ESG-related criteria include the removal of stocks that are non-compliant with international norms (based on an assessment by ISS-ESG) as well as firms with any exposure to controversial weapons.
Additionally, companies may also be excluded if they derive significant revenue from business activities related to tobacco, thermal coal, ‘unconventional’ oil and gas, and weapons.