BNP Paribas Asset Management has celebrated the tenth anniversary of its low carbon European equity ETF.
BNP Paribas has celebrated the tenth anniversary of its low carbon ETF.
The BNP Paribas Easy Low Carbon 100 Europe UCITS ETF was the first low carbon ETF, designed to offer investors an effective investment solution to reduce the carbon footprint of their investment portfolio.
The fund replicates the Low Carbon 100 Europe Index, an index created and published by exchange operator and index provider Euronext.
The index directs investment towards those companies that are most active in reducing their carbon emissions and offer the products and services required for energy transition to occur.
Constituents are assigned weights according to a modified weighting methodology based on carbon score, sector allocation and free float market capitalisation.
The index meets the requirements of the Paris Agreement, signed at COP21, which aim to limit average global temperatures to less than 2°C above pre-industrial levels. This requires green energy usage to increase and take over from fossil fuels, with all companies aiming to limit their CO2 emissions, or their indirect impact.
In accordance with this, the index consists of 100 stocks considered to be the most virtuous in their sector, creating a representative basket of companies that are making an effort to adapt to energy transition with a view to achieving the below 2°C target.
Ten to fifteen of these investments are in companies that positively contribute to energy transition, not only via their carbon performance, but also via the positive impact of their products and services on the climate.
Constituents are selected by a committee of experts responsible for supervising index composition and changes. The committee includes NGO representatives, independent environmental experts and sustainable development specialists from asset management companies and institutional investors.
Isabelle Bourcier, Head of Quantitative and Index-based Management at BNP Paribas Asset Management, commented: “BNP Paribas Asset Management is a major player within responsible investment and is helping to increase the number of investments associated with lowering carbon emissions.
“Since its launch in 2008, investment in BNP Paribas Easy Low Carbon 100 Europe UCITS ETF represents a reduction of around 40% in greenhouse gas emissions compared with its selection universe. The fund also offers a way of investing in future energy solutions, including renewable technologies or activities focused on energy efficiency”.
The fund currently has EUR 401 million in assets, up around 160% year on year. Investors include institutions, for whom the fund aligns with Article 173 of the French energy transition law obliging institutional investors to assess the impact of their investments, as well as private banks and distribution platforms.
It is listed on Euronext Paris (ECN FP) and Xetra (LCEU GY) and has estimated ongoing charges of 0.30% per annum.