BNP Paribas Asset Management (‘BNPP AM’) announces the launch of BNP Paribas Easy Low Carbon 100 Eurozone PAB UCITS ETF[1], a tracker fund that meets European standards for Paris Aligned Benchmark (‘PAB’) indices and offers investors a solution to reduce the carbon footprint of their portfolios.
A pioneer in low carbon ETFs, BNPP AM launched its first such fund in 2008, BNP Paribas Easy Low Carbon 100 Europe PAB® UCITS ETF, now valued at almost EUR 1 billion[2]. BNPP AM also recently launched a similar fund tracking a global equity universe, BNP Paribas Easy Low Carbon 300 World PAB® UCITS ETF.
BNPP AM has now launched a low carbon Eurozone equity ETF, BNP Paribas Easy Low Carbon 100 Eurozone PAB® UCITS ETF. This new PEA[3] eligible ETF has been continuously listed since 12 October 2021 on Euronext Paris and Deutsche Börse Xetra. It replicates the Euronext Low Carbon 100 Eurozone PAB NTR index, administered by Euronext.
The index selects 100 of the leading eurozone companies in terms of reducing CO₂ emissions, according to a best in class[4] approach, while excluding companies involved in certain business sectors, ESG[5] controversies and those with the worst Social and Governance scores.
Those companies actively participating in the energy transition, through the quality of their carbon performance and the positive climate impact of their business, represent at least 5% of the index. These ‘green companies’ are selected by a committee of experts that oversees the composition and development of the index.
Aligned with the goals of the Paris Agreement to limit global warming to 1.5° C by 2050, the index meets the European PAB standards, in particular requiring:
- compliance with strict requirements regarding the exclusion of fossil fuels (coal, oil and natural gas)
- a reduction in the carbon intensity of the index by at least 50% compared to its initial investment universe
- a portfolio decarbonisation target of at least 7% a year.
The index also includes a carbon footprint measurement based on scopes 1, 2 and 3, taking into account direct and indirect emissions.
BNP Paribas Easy Low Carbon 100 Eurozone PAB® UCITS ETF uses a methodology based on a significant commitment to ESG and is classified as SFDR Article 9.
Isabelle Bourcier, Head of Quantitative & Index Management at BNPP AM, comments:
“We are convinced that to be sustainable, the economy must move towards a low carbon model favouring the energy transition. To meet the expectations of professional and retail investors, BNP Paribas Asset Management is extending its range with the launch of this third ETF, thereby reaffirming its leadership in index solutions focused on ESG themes.”
Key Fund Characteristics (as at 12 October 2021)
ETF Name: BNP Paribas Easy Low Carbon 100 Eurozone PAB® UCITS ETF
ISIN Code: LU2194448267
Type of units: Capitalisation
Replication method: Physical
SFDR(a): Article 9
OCF(b): 0.30%
SRRI(c) : 6
(a) Sustainable Finance Disclosure Regulation 2019/2088 of the European Parliament and of the Council of 27 November 2019 on information to be provided on sustainable development in the financial services sector. Article 8 - product promoting environmental or social characteristics.
(b) Ongoing charge (on an annual basis)
(c) Synthetic Risk and Reward Indicator is determined on a scale of 1 to 7 (7 being the highest level of risk). It is calculated on a periodic basis and may therefore change over time. Regular consultation of the Fund's KIID/DICI is recommended.
Investments in the fund are subject to market fluctuations and the risks inherent in investments in securities. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay. The fund described presents a risk of capital loss. For a more complete definition and description of risks, please refer to the prospectus and KIID of the funds. Before subscribing, you should read the most recent version of the prospectus and KIID, which are available free of charge on our website www.bnpparibas-am.com.
Risk of taking ESG criteria into account: The absence of common or harmonised definitions and labels regarding ESG and sustainability criteria at the European level may lead to different approaches on the part of management companies when setting ESG objectives. It also means that it may be difficult to compare strategies that incorporate ESG and sustainability criteria as the selection and weightings applied to certain investments may be based on indicators that may share the same name but have different underlying meanings. When assessing a security based on ESG and sustainability criteria, the management company may also use data sources provided by external ESG research providers. Given the evolving nature of ESG, these data sources may at present be incomplete, inaccurate or unavailable. The application of responsible business conduct standards as well as ESG and sustainability criteria in the investment process may lead to the exclusion of securities of certain issuers. As a result, the Fund's performance may sometimes be better or worse than that of funds with a similar strategy.
Footnotes
- ^[1] Exchange Traded Fund
- ^[2] Source: BNPP AM, as at 6 October 2021
- ^[3] The Plan d'Epargne en Action (shared savings plan) is a tax-efficient way to invest and manage a portfolio of eligible French and European securities.
- ^[4] Selecting the best within each area of environmental, social and governance
- ^[5] Environmental, Social & Governance
