Investing sustainably worldwide with a special focus on combating climate change: The ETF with the complicated name BNP Easy MSCI World SRI S-Series PAB 5% Capped wants to offer investors exactly that. How does ECOreporter assess the sustainability of the ETF? And can it convince financially?
The ETF provider is BNP Paribas Easy, the ETF and index fund subsidiary of the major French bank BNP Paribas. How sustainable is she herself? An example: The bank only wants to stop financing coal projects in the EU after 2030. Outside of Europe, BNP Paribas plans to continue investing in coal projects until 2040.
Finance/Risk
The ETF launched on February 26, 2016 and has performed well financially. With a minus of 1.0 percent, it held up better than the global stock index MSCI World, which lost 2.8 percent in value over the course of a year. Viewed over five years, the increase in value of 65.3 percent is better than that of the MSCI World, which rose by 57.9 percent.
Annual fees are cheap at 0.25 percent. Due to strong fluctuations in value, ECOreporter recommends a holding period of at least seven, preferably ten years.
sustainability concept
The ETF invests in 339 medium and large companies from developed countries worldwide. To do this, he uses a best-in-class process: The companies in which he invests must belong to the quarter with the highest ESG rating within their industry.
ESG stands for the areas of ecology (E for Environment), social issues (S for Social) and responsible corporate management (G for Governance). However, there is no binding definition of what constitutes good ESG performance.
The companies are selected from a block of shares of the US financial services provider MSCI, a so-called “investment universe”. Compared to this investment universe, the share package of the ETF should have 50 percent less CO2 expel. In addition, the greenhouse gas emissions of all companies included should fall by 7 percent each year.
PNB Paribas sees the climate goals of the Paris Agreement as fulfilled. These include, in particular, preventing global warming from increasing by more than 1.5 degrees Celsius compared to pre-industrial times.
In this way, the ETF maps an index of the financial service provider MSCI. The companies were selected by MSCI.
exclusion criteria
The ETF excludes companies with any connection to banned weapons (such as land mines or cluster munitions) and nuclear weapons. Companies that violate the UN Global Compact, manufacture tobacco products or mine coal, oil and gas are also taboo.
In addition, sales thresholds apply, for example, to the generation of electricity from nuclear power (5 percent) or coal (10 percent) and other controversial business areas such as gambling, alcohol or armaments. Unusual but sensible: There are also restrictions on the transport and trade of oil and gas and oil and gas products. A detailed list of the exclusion criteria can be found in the premium area.
How sustainable is this ETF?
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