BNP Paribas Asset Management (BNPP AM) announced today that its BNP Paribas Easy Low Carbon 100 Europe UCITS ETF is now in line with the new Paris Aligned Benchmark (PAB) climate index, following a portfolio allocation adjustment.
As part of its action plan for sustainable finance, the European Commission defined two new types of climate indices – the Climate Transition Benchmark, promoting the climate transition and the more stringent PAB, aligned with the objectives of the Paris Agreement. The PAB imposes stricter requirements for the exclusion of fossil fuels, aiming to reduce carbon intensity by 50% compared to the initial investment universe, as well as setting a minimum annual carbon intensity reduction of 7%.
The ETF is designed to track the performance of Euronext’s Low Carbon 100 Europe Index, which aims to measure the performance of the 100 largest European companies having the lowest carbon intensity in their respective sectors. Earlier this month, Euronext adjusted the Low Carbon 100 Europe Index to align it with the PAB. The BNP ETF has been adjusted following this change in index methodology.
Isabelle Bourcier, Head of Quantitative & Index Management at BNPP AM said:
“BNP Paribas Asset Management is a pioneer of the low carbon theme, and this ETF, launched in 2008, has been very successful with professional and individual European investors eager to limit the carbon footprint of their investments. With EUR 816 million outstanding as at 15 July 2020, it is the largest ETF on low carbon European stocks.”