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Lyxor launches “first of a kind” climate change ETFs

Paris_COP21Lyxor ETF has launched ETFs focused on the Paris Agreement carbon emission reduction targets of 2015. The firm says the ETFs are the “first of their kind in Europe”.

The products target European, US, emerging market and world equities using MSCI Climate Change indices, which were designed to meet the main objectives of the EU Climate Transition Benchmarks.

The benchmarks include  an immediate 30% reduction in carbon intensity, while reallocating capital to the sectors and companies which decarbonise more successfully.

Lyxor said most major investment benchmarks currently imply temperature rises of around 4°- 6°C between now and 2100, “which could mean the end of humankind as we know it”.

As of April 2020, index creators will have to disclose whether their most significant benchmarks are aligned with the warming objectives of the Paris Agreement and later be able to suggest an alternative plan.

Arnaud Llinas, head of Lyxor ETF and indexing, said: “By revising its investment benchmark regulations, the EU has assigned passive, rules-based investment managers a key role in the fight against climate change. ETF providers have the opportunity, and indeed the responsibility, to help shift the trillions by offering simple, transparent products which meet the requirements of the new regulation.”

The US and emerging markets ETFs are already listed on Euronext and will be listed on London Stock Exchange on April 7th, with two further ETFs following shortly.

With total expense ratios of 0.25% or 0.30%, the ETFS are: Lyxor MSCI USA Climate Change Ucits ETF; Lyxor MSCI EM Climate Change Ucits ETF; Lyxor MSCI World Climate Change Ucits ETF; and Lyxor MSCI Europe Climate Change Ucits ETF.

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