At a conference in Paris, organised by BNP Paribas Investment Partners on “Finance and Environmental issues”, NYSE Euronext announced the launch of a new carbon index identifying European companies with a low carbon footprint: the “Low Carbon 100 Europe® Index”. This conference attracted investors, asset management professionals, NGOs and academics.
At the same time, BNP Paribas announced the creation of a new ETF, using the newly launched index as its underlying, the first to do so: “EasyETF Low Carbon 100 Europe”, which will list on Euronext Paris shortly. This ETF will give investors the opportunity to invest in companies with a low-carbon footprint..
The Low Carbon 100 Europe® Index is designed to measure the performance of the 100 largest blue-chip European companies with the lowest carbon (CO2) emissions in their respective sectors or sub-sectors. The index uses data provided by Trucost, a UK-based environmental research company, and Crédit Agricole Cheuvreux . It is based on a unique methodology developed in collaboration with experts from Paris Dauphine University and validated by an independent scientific committee.
The new index has been created in partnership with Non-Governmental Organisations (NGOs): AgriSud, GoodPlanet.org and WWF. When compared to the group of 300 of the largest European companies used as a benchmark, the companies included in the Low Carbon 100 Europe® Index have, on average, around 42% lower carbon emissions. This shows that NYSE Euronext is providing investors with an effective instrument that takes into consideration CO2 emissions and may be used as a relevant benchmark for portfolio management as well as a suitable underlying for index-linked products such as ETFs.
Jean-François Théodore, Deputy Chief Executive Officer, NYSE Euronext: “There is a growing investor appetite for products that are carbon efficient and we are delighted to launch the first pan-European low-carbon index, specifically designed with the support of an international group of experts and in close relation with NGOs . This innovative initiative enables NYSE Euronextt to offer investors a new trading tool and to enlarge our environmental offer, which already includes Bluenext and Metnext.”
Trucost Chief Executive Simon Thomas said: “Trucost’s work with NYSE Euronext provides all investors with the opportunity to invest in carbon-efficient companies in their industry sectors. As the cost of emissions increases, the ground-breaking ETF and underlying index are designed to enable fund managers and retail investors to achieve above market returns with a much lower exposure to carbon risk.”
EasyETF Low Carbon 100 Europe will aim at replicating the performance of the reference index, upward or downward.
Gilles Glicenstein, Chairman and Chief Executive, BNP Paribas Asset Management, said: “We are proud to associate the name of BNP Paribas Asset Management with this initiative and to be able before long to launch, with the support of our NGO partners, an innovative product. EasyETF Low Carbon 100 Europe will be the first tracker enabling individual and institutional investors to integrate the carbon constraint in their investment choices. Besides, the launch of this new product is a natural expansion of our commitment in management and promotion of sustainable and responsible investment.”
The NGOs which initiated this project are more than happy to see that two major actors on the European financial stage (BNP Paribas Asset Management and NYSE Euronext) are actively interested in ecological issues, in particular, reducing carbon dioxide emissions. They know that in the economic world, it is essential to have company involvement and action to be able to solve these issues. The “Low Carbon 100 Europe®” index and EasyETF Low Carbon 100 Europe fund will not fail to grab the attention of quoted companies and encourage them to make an effort to be on the index as their names will be supported by the new index and the new tracker. The ball is therefore back in companies’ and investors’ court," concludes Robert Lion, President of Agrisud.
