Lyxor launches first climate change ETF suite

Arnaud Llinas Lyxor

Lyxor has become the first issuer to launch an ETF suite that is designed to counter climate change.

The four-strong ETF range will offer exposure to European, US, emerging markets and world equity exposures.

The Lyxor MSCI USA Climate Change UCITS ETF (CLUS) and the Lyxor MSCI EM Climate Change UCITS ETF (CLEM) have been listed on Euronext in euros with plans to list on the London Stock Exchange in US dollars on 7 April.

The Lyxor MSCI World Climate Change UCITS ETF (CLWD) and the Lyxor MSCI Europe Climate Change UCITS ETF (CLEU) will launch shortly.

The suite will track MSCI’s climate change indices, which take into consideration the main objectives of the European Union’s regulations on investment benchmarks as part of the 2018 “Action Plan on Financing Sustainable Growth”. These indices launched last November.

A part of this plan was the creation of climate transition benchmarks by the EU Technical Expert Group (TEG) which looks to help investors redirect capital towards portfolios on a decarbonization trajectory.

To do this, the TEG benchmarks look to reduce global greenhouse emissions by 7% year-on-year to achieve carbon neutrality by 2050.

As of April 2020, index providers will have to disclose whether or not their most significant benchmarks are aligned with the warming objectives of the Paris Agreement.

The MSCI indices are designed to meet the main objectives of the EU Climate Transition Benchmarks including a 30% reduction in carbon intensity and a 7% annual emission reduction trajectory.

The indices also reallocate capital to sectors and companies which decarbonize more successfully.

Lyxor said the launch is the first in a series of climate-related ETFs over the course of this year.

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Arnaud Llinas (pictured), head of ETF and indexing at Lyxor, commented: “By revising its investment benchmark regulations, the EU has assigned passive, rules-based investment managers a key role in the fight against climate change.

“ETF providers have the opportunity, and indeed the responsibility, to help shift the trillions by offering simple, transparent products which meet the requirements of the new regulation.

“Through the addition of this unique range we are providing investors with yet more tools to achieve their climate goals.”

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