Leading European asset manager Amundi announced today the launch of the Just Transition for Climate strategy, an actively managed European fixed income fund with a quantifiable objective to support the energy transition while meeting criteria that consider social cohesion.

Acknowledging the potential economic disruption involved in achieving its energy transition goals, the Paris Agreement embedded the concept of a Just Transition, aiming to address the social implications of delivering a net zero economy world. The agreement included a clause:

“Taking into account the imperatives of a just transition of the workforce and the creation of decent work and quality jobs in accordance with nationally defined development priorities.”

According to Amundi, its new Just Transition for Climate strategy is the first fund to be fully aligned with the energy transition, while being socially inclusive, dynamic and forward looking. The fund incorporates an objective to reduce the carbon footprint, while integrating a “Just Transition” score incorporating the different social aspects involved in the transition to a low-carbon economy encompassing the impact on employees, consumers, local communities and society at large. Additionally, the fund embeds a tailor-made engagement policy to support issuers in their transition in line with the environmental and social objectives of the strategy.

The fund draws its investment universe from the Bloomberg Barclays Euro Aggregate Corporate Index, and uses the index as its benchmark. The strategy applies a negative screening methodology to this universe, based on climate and social criteria to maintain only those issuers that have affirmed a goal of reducing their carbon footprint, and do not present an extreme physical risk, and based on their ESG and Just Transition ratings.

The Just Transition for Climate Strategy is managed by Co-Lead Portfolio Managers Alban de Faÿ, Head of Fixed Income ESG investing and Dany da Fonseca, Credit Portfolio Manager.

Jean-Jacques Barberis, Head of the Institutional and Corporate Clients division & ESG at Amundi, said:

“Within the Paris Agreement, the concept of a fair transition is central to the transformation to “net zero” economies. There will be no transition if it is not socially acceptable. The social dimension of the transition is therefore becoming increasingly important for investors. The Just Transition for Climate fund is the first attempt to provide investors with a unique solution to measure and integrate the financial risks associated with climate change and use their investments for an inclusive transition in line with the Paris Agreement. The methodology will progressively evolve based on our dialogue with corporates.”