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THEAM Quant Europe Climate Carbon Offset Plan, new carbon offset fund

  • Isabelle Bourcier Head of quantitative management and index tracking.
  • Paris
  • 09.07.2019

BNP Paribas Asset Management has launched THEAM Quant Europe Climate Carbon Offset Plan, the first French UCITS (Undertakings for Collective Investment Schemes in Transferable Securities) fund associated with a carbon footprint offset mechanism. What are the goals of this launch and why is it an innovation in the sustainable finance landscape? Explanations with Isabelle Bourcier, Head of quantitative management and index tracking.

What is your role at BNP Paribas Asset Management?

At BNP Paribas Asset Management I am head of quantitative management and index tracking. In our team of more than 50 people, for 40 billion euros of assets under management at the end of May 2019. Around ten people supervised by Corinne Roger are dedicated to the structuring and management of systematic strategies developed by Global Markets and then implemented in a BNPP Asset Management fund format. So, we have worked together with the Global Markets teams and BNP Paribas Asset Management teams to launch this first UCITS fund to neutralise the carbon footprint of a diversified portfolio of European equities. 

What does the THEAM Quant Europe Climate Carbon Offset Plan fund consist of and in what way is it an innovation for green finance?

THEAM Quant Europe Climate Carbon Offset Plan fund is exposed to the performance of European equities complying with high Environmental, Social and Governance (ESG) standards and carefully selected according to their carbon footprint and the robustness of their energy transition strategy on the one hand and carbon footprint offset (Scope 1 and Scope 2) of these same companies on the other hand. 

Carbon footprint offset is achieved through the use of Verified Emission Reduction (VER) certificates, also known as carbon credits, from the "Kasigau Corridor REDD+" project. This project in south-east Kenya protects over 200,000 hectares of threatened arid forests. It has been developed by California-based Wildlife Works and is the first REDD+ project to issue VERs. In addition to the environmental impact, the investment in this project aims to generate long-term employment and promote sustainable livelihoods, thereby encouraging local communities to protect forests and their biodiversity. 

This is the first fund enabling institutional investors to offset a significant portion of the emissions arising from their investments under the UCITS directive.This fund represents a key step in closing the gap between impact and equity investments.

Photo : Isabelle Bourcier

In what context is this new fund being launched? 

The launch of this fund is fully in line with the fight against global warming initiated by BNPP AM through its new sustainability strategy and more broadly by the entire BNP Paribas Group which aims to support the energy transition online with the 2°C trajectory of the Paris Agreement. It is a strong commitment to contribute to the energy transition, on the one hand by accompanying its customers towards a low carbon economy, and on the other hand by reducing the environmental footprint related to its own operation. BNP Paribas, carbon neutral since 2017, has supported Wildlife Works since 2010 and uses this project to offset its carbon footprint. 

The launch of this fund is fully in line with the fight against global warming initiated by BNPP AM through its new sustainability strategy

The fund in France was approved in close collaboration with the AMF, which clarified its doctrine and published a "guide to carbon footprint offsetting by UCIs" to guide them on the "right path" to offset the carbon footprint of a UCITS fund.

What expertise did you mobilise internally to create this fund?  

This fund managed by BNP Paribas Asset Management France was created in collaboration with BNP Paribas Global Markets, the capital markets division of the bank. This fund represents a very good example of collaboration within BNP Paribas, between the Global Markets and Asset Management teams in terms of sustainable investment.

BNP Paribas Cardif, the insurance subsidiary of BNP Paribas that has just strengthened its socially responsible investment strategy initiated in 2008, is part of the fund's largest group of institutional investors.

BNP Paribas Asset Management

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Crédit photo :  header ©Armin

Investments in the funds are subject to market fluctuations and the risks inherent in investing in securities. The value of investments and the income they generate may rise as well as fall, and investors may not fully recover their investments. The described fund has a risk of loss of capital. For a more comprehensive definition and description of the risks, please see the prospectus and the KIID for the fund. Before subscribing, you must read the most recent version of the prospectus and free KIID available on our website www.bnpparibas-am.fr

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