BNP Paribas has introduced an ETF providing exposure to companies that are representative of the so-called ‘blue economy’.
BNP Paribas’s ‘blue economy’ ETF provides exposure to companies that demonstrate sustainable exploitation and responsible stewardship of ocean resources.
The BNP Paribas Easy ECPI Global ESG Blue Economy UCITS ETF has listed on Euronext Paris (BLUE FP) and Xetra (BJLE GY) and joins a growing family of sustainable investment products offered by the Paris-based issuer.
The fund is linked to the ECPI Global ESG Blue Economy Equity Index which tracks the equity performance of companies that demonstrate sustainable exploitation of ocean resources and responsible stewardship of the marine environment.
Index constituents are selected from a universe of developed market companies that exhibit positive environmental, social and governance (ESG) characteristics and are not materially involved in the armaments, tobacco, thermal coal, or unconventional oil and gas industries.
Conventional oil and gas companies are eligible if more than 40% of their revenue derives from natural gas extraction or renewable energy sources. Similarly, utility companies are eligible if their carbon intensity is aligned with a below-2-degree Celsius scenario.
From this screened pool of eligible stocks, ECPI identifies those companies that are considered to be most involved in the sustainable use of ocean resources, assigning companies to one of five ocean clusters.
Clusters include Costal Livelihood – coastal protection and eco-tourism; Energy & Resources – offshore wind, marine biotech, and wave & tidal; Fish & Seafood – wild catch fisheries, aquaculture farming, and aquaculture breeding & genetics; Pollution Reduction – recycling / waste management companies and environmental services, and, finally, Shipping Lanes – container shipping and ship equipment.
ECPI selects the 50 largest stocks as measured by market capitalization, subject to various constraints. Liquidity constraints include a minimum market capitalization of €500 million and an average daily traded value over the last six months of at least €3m. Diversification constraints include a cap of 15 stocks per cluster and a geographic concentration limit of 50% for US companies and 10% for all other countries as of each rebalance.
Constituents are equally weighted, with index constituents reviewed biannually to ensure market representation.
The current composition is heavily titted towards companies from the Industrials sector with 61.7%, followed by Utilities (18.8%), Consumer Staples (11.4%), Materials (6.4%), and Consumer Discretionary (1.7%). The United States contributes 15.7%, followed by Japan (10.2%) and the United Kingdom (9.9%), which trigger the 10% cap, Norway (7.9%), and Germany (7.8%).
The fund comes with an expense ratio of 0.30%. Income is capitalized.