London, UK – 28 April 2016 – BNP Paribas Corporate and Institutional Banking today announced that it has been licensed the FTSE Divest-Invest Developed 200 Index – a new index which reduces exposure to fossil fuels and associated companies while increasing exposure to companies engaged in the transition to a green economy. The bank plans to issue Delta One, swaps and structured products linked to the index later this year.
The FTSE Divest-Invest Developed 200 Index, which was launched today, is based on the largest 200 companies in the FTSE Developed All-Cap Index. All constituents of the underlying index are eligible for inclusion, except for those in the following Industrial Classification Benchmark (ICB) sectors and sub-sectors: Oil & Gas Producers, Oil Equipment Services & Distribution and Coal & General Mining.
These excluded companies are replaced by green companies whose weights are based on their Low Carbon Economy Industrial Indicator (LOWCII) factor. This factor is defined as a constituent’s ratio of green revenues to total revenues. This data is sourced from FTSE Russell’s LCE model, which is designed to capture changes in the revenue mix of companies as they increasingly provide goods, products and services that enable the world to adapt to, mitigate or remediate the impacts of climate change, resource depletion or environmental erosion.
Neven Graillat, Global Head of Sustainable Investment Solutions, Global Markets, BNP Paribas, said: “The agreement adopted at last November’s COP21 conference in Paris was recognised as a political success and it has helped to put climate risk at the top of the agenda for investors. At BNP Paribas, we have raised more than EUR3bn in sustainable equity solutions in the last three years including EUR750m in the last quarter alone from investors looking to reduce the carbon risk in their portfolios. We are therefore delighted to collaborate with FTSE Russell to deploy this new climate index solution. For the first time, investors are being offered a way to assess companies based on their green revenues. Using data modelled by FTSE’s LCE, the index offers an innovative tool to help manage investors’ carbon risk while tilting towards companies engaged in the transition to a greener economy.”
Cian Fitzgerald, Head of UK Institutional Clients, Global Markets, BNP Paribas, said: “We see increasing appetite from our institutional investor client-base wishing to address climate change in their investment process. This index will enable us to bring to market products which satisfy the investment requirements of our UK institutional clients.”
Kevin Bourne, Managing Director, Database Services, FTSE Russell, said: “We’ve seen a rapid expansion of the green businesses of many companies around the world. What’s been missing from measures of the ‘green transition’ is exposure to this growth side of the opportunity. FTSE Russell is delighted to launch this exciting and original product, the FTSE Divest-Invest Developed 200 Index. There is significant demand to capture the full picture of the transition in portfolios and financial products, reflected in BNP Paribas licensing the index.”
BNP Paribas is one of the largest underwriters of sustainable investment globally. In total, BNP Paribas has lead managed more than EUR11.1bn in green bonds including more than EUR1.1bn in equity-linked and sustainable development bonds (converted as at 15 April 2016 exchange rates). It also launched the World Bank’s first equity-index linked green bond in 2014 and has launched four ethical equity indices since 2013. To date, the bank has financed or advised on more than EUR7.2bn in renewable energy projects across the globe. Last November, BNP Paribas committed to more than doubling the amount of capital it allocates to renewable energy to EUR15bn by 2020.
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About BNP Paribas
BNP Paribas (www.bnpparibas.com) is a leading bank in Europe with an international reach. It has a presence in 75 countries, with more than 189,000 employees, including more than 146,000 in Europe. The Group has key positions in its three main activities: Domestic Markets and International Financial Services (whose retail-banking networks and financial services are covered by Retail Banking & Services) and Corporate & Institutional Banking, which serves two client franchises: corporate clients and institutional investors. The Group helps all its clients (individuals, community associations, entrepreneurs, SMEs, corporates and institutional clients) to realise their projects through solutions spanning financing, investment, savings and protection insurance. In Europe, the Group has four domestic markets (Belgium, France, Italy and Luxembourg) and BNP Paribas Personal Finance is the leader in consumer lending. BNP Paribas is rolling out its integrated retail-banking model in Mediterranean countries, in Turkey, in Eastern Europe and a large network in the western part of the United States. In its Corporate & Institutional Banking and International Financial Services activities, BNP Paribas also enjoys top positions in Europe, a strong presence in the Americas as well as a solid and fast-growing business in Asia-Pacific.
About BNP Paribas Corporate and Institutional Banking
Fully integrated in the BNP Paribas Group, BNP Paribas Corporate and Institutional Banking (CIB) (www.cib.bnpparibas.com) is a leading provider of solutions to two client franchises: corporates and institutionals, and operates across EMEA (Europe Middle East Africa), APAC (Asia Pacific) and the Americas. The bank is a global leader in Debt Capital Markets and Derivatives. It is a top European house in Equity Capital Markets and it has leading franchises in Specialized Financing. In Securities Services, it is a top five House worldwide. BNP Paribas CIB strives to service the global economy by providing solutions to its clients in financing (ECM, DCM, specialized financing), flow banking (trade finance and cash management), financial advisory (M&A, project finance), global markets (interest rates, credit, foreign exchange, equity derivatives), risk management, and securities services.