Ossiam, the quantitative investment manager and affiliate of Natixis Investment Managers, has announced the launch of a range of eight ETFs on Bloomberg Paris-Aligned Benchmarks (PABs) covering all major developed equity investment markets. The ETFs are domiciled in either Luxembourg or Ireland and have been newly created or transformed from former index funds.
The firm writes that the new passive strategies comply with Article 9 of the EU Sustainable Finance Disclosures Regulation (SFDR) and are aligned with the objectives set by the Paris Agreement. They give investors exposure to companies that aim to reduce greenhouse gas (GHG) emissions to limit the global temperature rise to below 2°C, and possibly below 1.5°C, compared to pre-industrial levels. This implies a GHG reduction of at least 50 per cent in relation to the 2020 base year and a 7 per cent year-on-year reduction until 2050.
The Ossiam PAB strategies favour companies with certified, scienced-based GHG reduction targets and exclude companies that significantly harm environmental objectives (Do No Significant Harm) and baseline exclusions. They are constructed with low tracking error versus their equivalent market capitalisation investment universe.
Paul Lacroix, Head of Structuring at Ossiam, says: “Moving our strategies to the Bloomberg Paris-Aligned Benchmarks is consistent with our long-term product development strategy to offer a wide range of useful building blocks. We can offer investors the most advanced and authentic approach to track equity markets with a trajectory for continuous carbon footprint reduction.”
Dave Gedeon, Global Head of Multi-Asset Indices at Bloomberg, says: “The market is shifting its focus to aligning both policy and investment to a net-zero future, so we worked extensively to create a new family of broad benchmarks that can be aligned with the Paris Accords. We’re proud to have been selected by Ossiam to provide equity benchmarks for eight new ETFs, offering investors the opportunity to align their portfolios with the confidence of Bloomberg’s industry leading climate data powering these benchmarks.”
Nadia Humphreys, Product Manager for Sustainable Finance Solutions at Bloomberg and Co-rapporteur on the Platform for Sustainable Finance of the European Commission, says: “Investors need to take a robust approach to due diligence on ESG data and regulatory compliance. In particular for benchmarking, it is important to make sure the methodology behind Paris-aligned indices is aligned with the detail of regulations, notably with the “do no significant harm” criteria used to determine EU-Taxonomy alignment, and with guidance on the use of carbon estimates.”
All ETFs are listed on Deutsche Börse, Euronext Paris and Swiss SIX stock exchanges.