Industry Updates

French pension fund benchmarks €300m against Scientific Beta PAB climate index

The mandate could last as long as six years

Jamie Gordon

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The €41.7bn additional pension scheme for French civil servants (ERAFP) has awarded a €300m mandate to factor and ESG specialist Scientific Beta to track its Eurozone Paris-Aligned Benchmark (PAB) index.

The collaboration has seen a new fund launch tracking the Scientific Beta Eurozone Climate Impact Consistent EU PAB Compliant index, which is aligned with ERAFP’s commitment to the Net Zero Asset Owner Alliance.

The mandate will be awarded on a four-year basis, with the option to extend by an additional year twice, to a total potential term of six years.

Scientific Beta described the move as a “major vote of confidence” for its climate impact range, which launched in 2021 and integrate a mixture of climate-based exclusions and weighting methodology.

Kin Yee Ng, CEO of Scientific Beta, commented: “We are gratified that ERAFP has seen fit to award such a significant mandate on the basis of Scientific Beta’s climate impact consistent (CIC) indices. 

“Traditional climate indices and benchmarks, which combine financial and climate criteria, frequently lead to contradictions with compromised climate impact. We believe our CIC indices’ strict focus on climate objectives raises the bar for climate action.”

Last year, Swedish insurance and pensions company Länsförsäkringar removed BlackRock’s mandate and brought the management of two index funds in-house, while reindexing the products to incorporate PAB metrics.

Between 2019 and 2019, Dutch pension fund Pensioenfonds Detailhandel partnered with BlackRock and FTSE Russell to align almost half of its €32bn portfolio with United Nations Sustainable Development Goals (SDG) principles.

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