BNP Paribas Asset Management launches low carbon ETF with global exposure

June 29, 2021

BNP Paribas Asset Management (‘BNPP AM’) announces the launch of BNP Paribas Easy Low Carbon 300 World PAB UCITS ETF, a thematic listed index fund offering savers an investment solution to reduce the carbon footprint of their portfolio, aligned with the goals of the Paris agreement.

A pioneer in low carbon ETFs, in 2008 BNPP AM launched its first such fund, now with AUM of EUR 860 million, on a European equity index.  The launch of BNP Paribas Easy Low Carbon 300 World PAB UCITS ETF continues BNPP AM’s long-standing commitment to a low carbon economy.

Benefiting from expanded global exposure, this new ETF, which listed on Euronext Paris and Deutsche Börse Xetra on 29 June, replicates the Low Carbon 300 World PAB index.  Administered by Euronext, the index consists of 300 best-in-class international companies, notably industry leaders in reducing CO emissions.  Among the 300 index constituents is a 15% allocation to ‘green’ companies, selected by a committee of experts, which generate at least half of their revenue from renewable energy or the development of low carbon technologies.

The index is in line with the Paris Aligned Benchmark (‘PAB’), as well as the goals of the Paris Agreement, which aim to limit global warming to 1.5° C by 2050.  These standards apply strict exclusion requirements for fossil fuels (coal, oil, natural gas) and include reducing the carbon intensity of the index by at least 50% relative to its initial investment universe, as well as a portfolio decarbonisation target of at least 7% per year.  The PAB index also provides for a carbon footprint measurement based on Scope 1, 2 and 3 emissions, thereby taking into account both direct and indirect emissions.  Given its specific sustainable objective, this ETF is classified as Article 9 according to the Sustainable Finance Disclosure Regulation (‘SFDR’).

Isabelle Bourcier, Head of Quantitative & Index Management at BNPP AM, comments:

The increasing awareness of climate issues among savers, coupled with regulatory changes, is generating high expectations on their part, which is why we have chosen to expand the geographical exposure of our low carbon index offering internationally.  With the launch of this ETF, BNPP AM is affirming its leadership in thematic index solutions, and is expanding its range, which already includes index funds and ETFs on the themes of the circular economy (2019), blue economy (2020) and ESG infrastructure (2020).”

In 2011, BNPP AM started to measure the carbon footprint of its sustainable equity funds and mandates, and in May 2015 was one of the first signatories of the Montreal Carbon Pledge.  This year, BNPP AM introduced carbon footprint reporting for its funds to ensure quality and transparency.

Key Fund Characteristics

Name:  BNP Paribas Easy Low Carbon 300 World PAB UCITS ETF
ISIN Code:  LU2194449075
Share type:  Capitalisation
Replication method:  Physical
SFDR1 Classification:  Article 9
SRRI2:  5
OCF3:  0.30%

1. Sustainable Finance Disclosure Regulation.  Article 9 funds specifically have sustainable goals as their objective.
2. Synthetic Risk & Return Indicator.  Scale of 1 (lowest) to 7 (highest ).  SRRI is calculated on a periodic basis and may change over time.
3. Ongoing Charges Figure.

Investments in the funds 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 funds described present 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

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.

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As at June 2021.