Amundi, Europe’s largest asset manager by AUM, announced that it has secured a mandate from a group of major French investors to manage a euro zone equity index aligned with the Paris Agreement. The investor group consisted of Caisse des Dépôts, EdF, and insurers Allianz France, Aviva France, Axa France, BNP Paribas Cardif, BPCE, CNP Assurances, Crédit Agricole Assurances, Macif, Maif and la Société Générale Assurances.
Amundi stated that the new index will be the first investment solution that is fully eligible for the future European label “Paris Aligned Benchmark ” enabling investors to invest in a portfolio aligned with the objectives of the Paris Agreement.
The Paris Agreement is a multi-nation pact developed by parties to the United Nations Framework Convention on Climate Change (UNFCCC) to combat climate change. The agreement’s main goal is to limit the global temperature increase in this century to below 2 degrees Celsius above pre-industrial levels, and to work toward limiting the increase to 1.5 degrees.
Paris alignment implies strong participation by index constituents in ambitious climate transition goals. Amundi anticipates that the index should see a reduction in carbon intensity of more than 50% compared to the initial investment universe, with at least 7% in annual reductions. Furthermore, the index parameters include ESG and Climate sector exclusion thresholds, such as tobacco, controversial weapons, and coal.
Index weightings will be adjusted according to the companies’ transition trajectory, based on commitments made under the Science Base Target (SBTI) initiative. In practice, the index will gradually exclude companies that do not take objectives within the parameters of the SBTI. The investment solution therefore encourages issuers to embark on a transition trajectory aligned with the Paris Agreement.
Yves Perrier, CEO of Amundi, said:
“We are proud to support the group of institutional investors of the Place de Paris in their original initiative in favor of the climate and we thank them for their confidence. This approach is fully in line with the Crédit Agricole group’s climate strategy, within the framework of which Amundi is resolutely mobilized in the promotion and development of sustainable investment strategies across all of its management platforms. In particular, we are convinced that index management will play a decisive role in the development of robust and transparent solutions to enable investors to commit to a low-carbon economy.”