Industry Updates

BNP Paribas AM aligns low carbon ETF with Paris Aligned Benchmark

Climate benchmarks introduced by the European Commission last year

Tom Eckett

a woman smiling for the camera

BNP Paribas Asset Management (BNPP AM) has aligned its low carbon Europe ETF with the Paris Aligned Benchmark (PAB) that was introduced by the European Commission last year.

The €821m BNP Paribas Easy Low Carbon 100 Europe UCITS ETF (ECN) tracks Euronext Low Carbon 100 Europe index which changed its methodology to incorporate the PAB.

Along with the Climate Transition Benchmark (CTB), the PAB was introduced by the European Commission as part of its action plan for sustainable finance.

It imposes more stringent requirements for fossil fuel exclusions with the aim of reducing carbon intensity by 50% versus the investment universe as well as implementing a 7% minimum annual carbon intensity reduction.

Launched in 2017, ECN already incorporates objectives of the Paris Climate Agreement and includes 15 ‘green’ values identified by a committee of experts.

This leads to a selection of 100 European stocks considered to be the most virtuous in their sector in terms of carbon emissions.

Isabelle Bourcier (pictured), head of quantitative and index management at BNPP AM, commented: “This ETF has been successful with professional and individual European investors eager to limit the carbon footprint of their investments.”

A number of issuers have launched climate change ETF ranges recently following the introduction of the European Commission’s two climate benchmarks.

Lyxor was the first issuer to do so in March with the launch of a four-strong ETF suite tracking MSCI indices.

Amundi subsequently unveiled three Paris-aligned equity ETFs in July before German issuer Deka listed a five-strong climate ETF range in Germany.

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