BNP Paribas Launches Sustainable Corporate Bond ETFs

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BNP Paribas Asset Management has introduced two new exchange-traded funds (ETFs) focused on sustainable corporate bonds. The BNP Paribas Easy € Corp Bond SRI Fossil Free Ultrashort Duration UCITS ETF (BJLI) and the BNP Paribas Easy USD Corp Bond SRI Fossil Free UCITS ETF (BJLJ) are listed on several European stock exchanges and aim to provide investors with exposure to environmentally responsible corporate bonds while excluding issuers involved in controversial industries.

BJLI tracks the Bloomberg MSCI Euro Corporate Ultrashort Fixed and Floating Rate SRI Bond index, which includes approximately 400 euro-denominated, investment-grade corporate bonds with an average maturity of 0.7 years. To be eligible for inclusion, bonds must have at least €500 million outstanding.

BJLJ replicates the Bloomberg MSCI US Corporate SRI Sustainable ex Fossil Fuel Bond index, consisting of 3,400 US dollar-denominated, fixed-rate, investment-grade bonds with an average duration of 6.8 years. Bonds with at least $500 million outstanding are included in this index.

Both ETFs exclude issuers with ‘red’ MSCI controversy scores and businesses involved in industries such as alcohol, tobacco, gambling, and fossil fuels. They are classified as Article 8 under the Sustainable Finance Disclosure Regulation (SFDR) and are designed to provide sustainable strategies with low tracking error compared to their parent indices.

Lorraine Sereyjol-Garros, Global Head of Development for ETFs and Index Funds at BNP Paribas Asset Management, explained that the launch of these ETFs is in response to strong client demand for sustainable fixed-income solutions. These new offerings complement the firm’s existing range of fixed-income ESG ETFs.

ETF Newz Says:

The ETFs are domiciled on BNP Paribas Asset Management’s Luxembourg SICAV platform, with equivalent mutual funds launched on the platform in September. While there are no immediate plans to launch fixed-income ETFs on the Irish ICAV platform, BNP Paribas Asset Management has talked of considering it in the future.

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