BNP Paribas Asset Management launches its first active Global Net Zero Transition equity fund

BNP Paribas Asset Management (‘BNPP AM’) announces the launch of the BNP Paribas Global Net Zero Transition Equity fund, a Luxembourg-domiciled equity fund offering investors exposure to a well-diversified strategy across sectors, regions, and market cap, with a strong focus on decarbonization and an overweight in Sustainable Investment.  

• One of the few active equity funds in the market with net-zero alignment as a primary objective with a Just Transition lens  

• A portfolio diversified across sectors and regions with a broad investment universe and little to no significant style, regional or sectorial tilts vis-à-vis the benchmark 

• A behavioural fundamental approach aiming at delivering consistent excess returns  

• The fund’s investment objective is to reduce GHG^[1] emissions and implied temperature rise (ITR) below 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 consists of a high conviction portfolio selected from more than 1,000 global companies focusing on achieving Net Zero with a Just Transition lens. The investment universe is diversified by geography, size and sector, with technology, industrials and materials well represented, resulting in little industry risk versus the benchmark. The investment universe includes adopters and solutions providers to contribute to the reduction of global GHG emissions, with portfolio ITR target below 2°C.  

The fund is managed as an active core fund, using the Global Equity team’s investment philosophy and process that has its roots in behavioural finance. To select stocks in the portfolio and assess companies' net-zero alignment, the investment team uses the BNPP AM Sustainability Centre’s proprietary net-zero alignment framework, which is inspired by the Paris Aligned Investment Initiative’s Net Zero Investment Framework^[2]. 

The fund is classified Article 8 as per SFDR^[3] and is committed to having at least 50% in holdings that qualify as 'sustainable' under BNPP AM SFDR implementation approach. 

BNP Paribas Global Net Zero Transition Equity is another landmark on BNPP AM's Net Zero roadmap, published in November 2022 and 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 integrate a charity share class to fund Electriciens Sans Frontières^[4] whose mission is to fight, since 1986, against inequalities of access to electricity and water throughout the world. With the support of our 1200 volunteers and through partnerships with local actors and using renewable energies, the international NGO and registered charity makes access to electricity a lever for human and economic development. It aims to reduce energy poverty, fight climate change and promote the energy transition. 

Key fund characteristics  

Footnotes

1. ^{^} Greenhouse gas emissions
2. ^{^} https://www.iigcc.org/resources/net-zero-investment-framework-implementation-guide 
3. ^{^} Sustainable Finance Disclosures Regulation
4. ^{^} Electricians without border
5. ^{^} Following the new Sustainable Finance Disclosure Regulation (SFDR) that came into force on 10 March 2021, BNP Paribas Global Net Zero Transition Equity is categorised under Article 8. Under this new regulation, financial entities such as BNP Paribas Asset Management who sell products into the EU are required to classify the products they manufacture or advise into three categories: Article 9: products with a sustainable investment objective / Article 8: products promoting environmental or social characteristics / Article 6: non-sustainable products 
6. ^{^} Summary Risk Indicator