Industry Updates

Amundi adds ESG metrics to oil and gas ETF

OIL will be upgraded to Article 8 under SFDR

Theo Andrew

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Amundi is switching the index on its Lyxor oil and gas ETF to one that includes an ESG screening methodology as well as bringing it under its own branding.

In a shareholder notice, Amundi said the Lyxor STOXX Europe 600 Oil & Gas UCITS ETF (OIL) will go from tracking the STOXX Europe 600 Oil & Gas Net Total Return index to the STOXX Europe 600 Energy ESG+ index.

This new index will apply ESG screens excluding companies that are non-compliant with the ISS-ESG Norms-based screening assessment or those involved in controversial weapons.

Furthermore, companies will be screened out based on their involvement in tobacco, thermal coal, ‘unconventional’ oil and gas, civilian firearms and military contracting.

Following the change, the ETF will be renamed to the Amundi STOXX Europe 600 Energy ESG Screened UCITS ETF.

The ETF will be reclassified from Article 6 to Article 8 under the Sustainable Finance Disclosure Regulation (SFDR) following the switch, which means it will promote “environmental or social characteristics”.

The ETF will also see its replication method changes from indirect to direct.

OIL, which currently has €352.9m assets under management (AUM), has returned 68.9% over the past three years versus 48.1% for its new index.

It is the latest switch to an ESG index by Amundi after it switched four ETFs to ones that track ESG metrics including the €396m Amundi STOXX Global Artificial Intelligence UCITS ETF (GOAI).

Europe’s largest asset manager is aiming to have 40% of its ETF range made up of ESG products by 2025, almost double the 23% it currently housed when it announced the targets in December 2021.

Amundi is continuing to merge its product range following its acquisition of Lyxor last year in a bid to consolidate its product range and benefit from economies of scale.

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