BNP Paribas Asset Management (BNPP AM) has launched a new ETF to meet the European standards for the Paris Aligned Benchmark (PAB).
The new ETF, called the ‘BNP Paribas Easy Low Carbon 100 Eurozone PAB UCITS ETF', selects 100 eurozone companies that both lead in reducing carbon emissions and follow the social and governance requirements for an ESG.
It is classified under Sustainable Finance Disclosure Regulation as Article 9, or a ‘dark green' fund.
‘Green companies' that actively participate in the transition away from fossil fuels represent at least 5% of the index and are selected by a committee of experts that oversaw the composition and development of the ETF. The index also includes a carbon footprint measurement, considering direct and indirect emissions.
BNPP AM launched its first low carbon ETF in 2008, which is now valued at almost €1bn, and recently launched a similar ETF to this one, which tracks a global equity universe for 300 companies.
The PAB standards include such goals as a portfolio decarbonisation target of at least 7% a year, a reduction in the carbon intensity of the index by at least 50% compared to its initial investment universe, and strict exclusion of fossil fuel companies.
The Ongoing Charge Figure for the fund is 0.30% and the Synthetic Risk and Reward Indicator is six.
Isabelle Bourcier, head of quantitative and index management at BNPP AM, said: "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."