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BNP Paribas AM launches low carbon global Paris-aligned climate ETF

Targets a 50% carbon intensity reduction and an annual decarbonisation target of at least 7%

Tom Eckett

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BNP Paribas Asset Management (BNPP AM) has launched a low carbon global equities ETF that is aligned with the European Union’s Paris-Aligned Benchmark (PAB).

The BNP Paribas Easy Low Carbon 300 World PAB UCITS ETF (LCWLD) is listed on Euronext Paris and Deutsche Boerse with an ongoing charges figure (OCF) of 0.30%.

Tracking the Euronext Low Carbon 300 World PAB index, LCWLD offers exposure to 300 global equities that are industry leaders in reducing carbon dioxide emissions.

Among the 300 index constituents is a 15% allocation to green companies that generate at least half of their revenue from renewable energy or the development of low carbon technologies.

LCWLD is also in line with the PAB which is part of the Paris Agreement’s aim of limiting global warming to 1.5°C by 2050.

In order to achieve this, ETFs linked to the PAB target a carbon intensity reduction of at least 50% relative to the investment universe as well as an annual decarbonisation target of at least 7%.

The PAB’s carbon footprint measurement is based on Scope 1, 2 and 3 emissions and therefore, accounts for both direct and indirect emissions.

LCWLD is classified as Article 9 under the Sustainable Finance Disclosure Regulation (SFDR).

Commenting on the launch, Isabelle Bourcier (pictured), head of quantitative and index management at BNPPAM, said: “The increasing awareness of climate issues among savers, coupled with regulatory changes, is generating high expectations on their part, which is why we have chosen to expand the geographical exposure of our low carbon index offering internationally.”

Are climate change ETFs greenwashing?

This is not the French asset manager’s first ETF to track the EU’s climate benchmarks. Last July, the ETF issuer aligned its low carbon Europe ETF, the BNP Paribas Easy Low Carbon 100 Europe UCITS ETF (ECN), with the PAB.

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