BNP Paribas adds to sustainability index rush

BNP Paribas adds to sustainability index rush

French bank BNP Paribas is the latest to join the rush of index providers launching non-conventional products as it brings a global 'sustainability' index to market.

BNP's Corporate and Institutional Banking group has launched the Solactive Sustainable Development Goals World Index, which enabled investors to get exposure to companies that make a "significant contribution to the advancement" of the UN's Sustainable Development Goals.

The 'smart beta' index, which joins another European-focused products, was made in collaboration with Solactive, whose volatility and diversification filter helped whittle down the list of stocks to 50.

BNP said the index will contain stocks which have a "clear, positive net impact on sustainable development" using a method designed by Vigeo Eiris Equitics - which mapped the UN's requirements against stocks' products and behaviours.

"Companies for whom sustainable products such as renewable energy or essential medicines represent a significant proportion of activity are eligible. Companies with major involvement in disputed activities such as nuclear, tobacco or firearms are left out, [and those] involved in critical controversies such as human rights violations," BNP said.

The bank's new product came amid a raft of launches focusing on areas such as sustainability, environmental, social and governance (ESG) factors, ethical investing and 'green' serieses.

Morningstar, the data provider, launched its own series of sustainability indices just yesterday (October 5), with the firm citing "growing trends" and "client demand".

The 25-strong set of stock-listings covered regional, developed and emerging markets and single-country exposure.

Neven Graillat, head of sustainable investment solutions at BNP Paribas Global Markets, said: "Financial markets must support commercial innovations to deliver on the Sustainable Development Goals, and we believe that investors and corporations have a major role to play."

Henning Kahre, head of research at Solactive AG, added: "We see increasing demand for indices offering ESG compliant access to markets."