BNP Paribas Asset Management (BNPP AM) has launched an ETF targeting European growth equities with an environmental, social and governance (ESG) screen.
The BNP Paribas Easy ESG Growth Europe UCITS ETF (EGRO) is listed on Euronext Paris and the Deutsche Boerse with a total expense ratio (TER) of 0.30%.
Synthetically replicating the BNP Paribas Growth Europe TR index, EGRO offers exposure to 76 European growth stocks that perform best on ESG metrics, estimated sales growth, capital expenditure growth, internal growth rate and employee growth.
EGRO also excludes companies involved in arms, pornography, tobacco, gambling and UN Global Compact principle violations.
If the remaining companies represent more than 80% of the original pool, the worst-performing are excluded, so that the remaining number is 20% below the initial universe.
The best-performing 400 stocks are then assigned growth scores and a decile based on their ESG performance. Companies within a model optimal weight below 0.01% are discarded.
Finally, an algorithm is used to amalgamate the optimal growth factor exposure with carbon profile considerations – this also takes liquidity, turnover, exposure and tracking error (versus the STOXX Europe 600 index) into account. Constituent weightings are then reviewed on a monthly basis.
EGRO is classified as Article 8 under the Sustainable Finance Disclosure Regulation (SFDR) and accompanies another launch from BNPP AM this week, the BNP Paribas Easy Low Carbon 300 World PAB UCITS ETF (LCWLD), which falls under the remit of SFDR Article 9.