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BNP Paribas AM aligns Easy Low Carbon 100 Europe UCITS ETF with Paris-aligned benchmark standard


BNP Paribas Asset Management (BNPP AM) has adjusted the portfolio allocation of the BNP Paribas Easy Low Carbon 100 Europe UCITS ETF, following a change in index methodology.  The Euronext Low Carbon 100 Europe index, already aligned with the objectives of the Paris Climate Agreement, is now in line with the new Paris Aligned Benchmark (PAB) climate index.  This change took effect on 10 July.

As part of its action plan for sustainable finance, the European Commission has defined two new types of climate indices, one promoting the climate transition (Climate Transition Benchmark) and the other aligned with the objectives of the Paris Agreement (Paris Aligned Benchmark).  The Paris Aligned Benchmark (PAB) imposes more stringent requirements for the exclusion of fossil fuels, aiming to reduce carbon intensity by 50% compared to the initial investment universe, as well as setting a minimum annual carbon intensity reduction of 7 per cent.

On 10 July, Euronext changed the methodology of its Low Carbon 100 Europe index, created in 2008, to align it with the PAB. The methodology consists of selecting 100 European stocks considered to be the most ‘virtuous’ in their sector in terms of carbon emissions.  It includes up to 15 ‘green’ values identified by a committee of experts, which make a positive contribution to the energy transition.

Isabelle Bourcier, Head of Quantitative & Index Management at BNPP AM, says: “BNP Paribas Asset Management is a pioneer of the low carbon theme, and this ETF, launched in 2008, has been very successful with professional and individual European investors eager to limit the carbon footprint of their investments.  With EUR 816 million outstanding as at 15 July 2020, it is the largest ETF on low carbon European stocks.”

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