Alternative Investments/ESG: BNP Paribas Debuts Two New ESG-Focused Fixed Income ETFs

Both ETFs are classified as an Article 8 product under the European Union’s Sustainable Finance Disclosure Regulation (SFDR).

BNP Paribas Asset Management has launched two new ESG-oriented fixed income ETFs, each with an expense ratio of 0.15%.

The BNP Paribas Easy JPM ESG EMU Government Bond IG 1-3Y ETF tracks the JP Morgan ESG EMU Government Bond IG 1-3 Year Index, while the BNP Paribas Easy Euro Aggregate Bond SRI Fossil Free ETF is linked to the Bloomberg MSCI Euro Aggregate ex Fossil Fuel SRI Select Index.

Both ETFs are classified as Article 8 products under the European Union’s Sustainable Finance Disclosure Regulation (SFDR).

The former provides exposure to short-duration eurozone government bonds while the latter targets a broad maturity portfolio of euro-denominated, investment-grade debt. The funds are designed to meet investors’ rising preference for fixed income exposure using an ESG emphasis.

The BNP Paribas Easy JPM ESG EMU Government Bond IG 1-3Y ETF utilizes data from Sustainalytics, RepRisk, and the Climate Bonds Initiative to overweight green bond issues or issuers ranked higher on ESG criteria, and underweight or remove issuers that rank lower.

The BNP Paribas Easy Euro Aggregate Bond SRI Fossil Free ETF screens out violators of UN Global Compact principles, issuers embroiled in severe ESG-related controversies, and firms with notable business operations linked to adult entertainment, alcohol, gambling, tobacco, weapons, nuclear power, thermal coal, fossil fuels, and genetically modified organisms. The remaining issuers are assigned ESG scores based on an analysis conducted by MSCI ESG Research.

“These launches provide investors with additional asset allocation building blocks that have limited levels of tracking error comparable to non-ESG benchmarks,” said Lorraine Sereyjol-Garros, Global Head of Development for ETFs and Index Funds at BNP Paribas Asset Management. “Our range also includes Paris-aligned benchmark bond ETFs.”

Related Story:  BNP Paribas Launches ETFs Targeting Hydrogen And Sustainable Real Estate

Image credit: Image by Gerd Altmann from Pixabay

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