BNP Paribas Asset Management has revealed the launch of the BNP Paribas Global Net Zero Transition Equity fund, an equity fund based in Luxembourg that offers investors a diverse strategy across different sectors, regions, and market cap, with a strong emphasis on reducing carbon emissions and a higher focus on Sustainable Investment.
- One of the few active equity funds in the market with a main goal of achieving net-zero alignment using a Just Transition approach
- A portfolio that is spread across various sectors and regions, with a wide range of investment options and minimal style, regional, or sector-specific differences compared to the benchmark
- A behavior-based fundamental approach aiming to consistently deliver extra returns
- The fund's aim is to decrease GHG emissions and implied temperature rise (ITR) to less than 2 degrees over time
Nadia Grant, Head of Global Equities at BNPP AM and Portfolio Manager of the BNP Paribas Global Net Zero Transition Equity fund, comments:
“Net zero can be achieved through directing investments towards companies providing solutions and those adopting solutions to decarbonise and therefore contribute to net zero alignment. With this new equity fund, we aim to provide an innovative strategy aligned with BNPP AM Net Zero commitments while leveraging our social and environmental expertise and focusing on engagement.“
BNP Paribas Global Net Zero Transition Equity comprises a portfolio with strong convictions selected from over 1,000 global companies that focus on achieving Net Zero with a Just Transition perspective. The investment options are diverse in terms of geography, size, and sector, with a notable presence of technology, industrials, and materials, resulting in minimal industry risk compared to the benchmark. The investment universe includes adopters and solutions providers to help reduce global GHG emissions, with a portfolio ITR target below 2°C.
The fund is managed as an active core fund, utilizing the Global Equity team’s investment philosophy and process that is grounded in behavioral finance. To select stocks for the portfolio and assess companies' net-zero alignment, the investment team uses the BNPP AM Sustainability Centre's exclusive net-zero alignment framework, which is influenced by the Paris Aligned Investment Initiative's Net Zero Investment Framework.
The fund is classified Article 8 under SFDR and is committed to having at least 50% of holdings that qualify as 'sustainable' under BNPP AM SFDR implementation approach.
BNP Paribas Global Net Zero Transition Equity is another significant milestone on BNPP AM’s Net Zero roadmap, published in November 2022, that aims for 60% of in-scope investments to be Achieving, Aligned, or Aligning with Net Zero (NZ:AAA) by 2030 and 100% of in-scope investments to be NZ:AAA by 2040.
Jane Ambachtsheer, Global Head of Sustainability at BNPP AM, adds:
“We are excited to launch our first fund to invest only in the universe of companies which meet the criteria of our net zero ‘AAA’ framework: that is, companies which are achieving, aligned or aligning to net zero. Using this framework as the starting point sets a clear ambition for the companies that will be in the portfolio in a straightforward manner for clients. This fund also marks one of our first steps in adding a specific Just Transition lens to our investment decision making and engagement process. The greening of the economy provides the potential to create jobs and build new industries. A “just transition” should be fair and inclusive and create decent work opportunities. It’s an important part of how investors should assess and engage with companies during this period of transition.”
BNP Paribas Global Net Zero Transition Equity will also incorporate a charity share class to support Electriciens Sans Frontières, an international NGO fighting against inequalities in access to electricity and water worldwide since 1986. With the aid of 1200 volunteers and through partnerships with local organizations and the use of renewable energy, the organization aims to use access to electricity as a means for human and economic development, with the goal of reducing energy poverty, combating climate change, and promoting the energy transition.
