Lyxor Asset Management has received the TEEC (energy and ecological transition for the climate) certification for the Lyxor Green Bond (DR) UCITS ETF, what the company says is the world’s first ETF offering investors exposure to investment grade green bonds.
Launched two years ago on the basis of a Solactive index with support from the Climate Bonds Initiative, the Green Bond ETF is the first ETF to receive this label.
Introduced by the French government at the end of 2015 following the COP21, TEEC is the first national certification for private investment in the green economy. Awarded on the basis of exacting standards regarding the ‘green’ quality of underlying assets, it guarantees that investment funds carrying this certification are committed to financing the green economy as well as ecological and energy transition. In addition to following the Green Bond Principles, TEEC certification requires a calculation of the ‘green part’ of bonds, the total exclusion of certain activities (such as nuclear energy and fossil fuels) and the monitoring of ESG controversies that could affect the projects financed. It also requires an analysis of these projects’ environmental impact.
TEEC certification for investment funds completes the range of financing instruments provided for by the Energy Transition for Green Growth Act of 17 August 2015. The aim is to channel savings to benefit energy and ecological transition and assure investors that the assets and projects financed meet the highest market standards throughout a project’s life. It is in line with current efforts to create a European ecolabel for green financial products, making France a pioneer in green certification. To date, 28 European funds have been certified, with global assets under management of around EUR 5.5 billion.
Florent Deixonne, Head of SRI at Lyxor Asset Management, says: “Reflecting Lyxor’s strong culture of innovation, the TEEC-certified Lyxor Green Bond (DR) UCITS ETF combines the transparency and liquidity advantages of passive management with the benefits of an active analysis of projects financed by the green bonds held in the portfolio, meeting the label’s strictest quality demands”.
The Lyxor Green Bond UCITS ETF is invested in an index of EUR or USD denominated investment grade green bonds representing more than 300 million, with a ‘green share’ accounting for over 95 per cent of assets financed according to the requirements of this certification. It is listed on Euronext, London Stock Exchange, Nasdaq-OMX Stockholm and Xetra, and has ongoing charges of 0.25 per cent. A EUR hedged share class is also available.