A new global equity strategy launched by BNP Paribas Asset Management is walking the walk when it comes to moving toward a low-carbon world, with a charity share class focused on supporting an organization that aims to combat inequalities in access to electricity and water.
The Global Net Zero Transition Equity Fund, run by BNP PAM, includes a charity share class that's allocated toward Electriciens Sans Frontieres, which works to reduce energy poverty, fight climate change and promote the energy transition across the globe.
"We have this partnership to really show that we want...not just to help companies allocate capital towards decarbonization, but also walk the walk as we'll be giving parts of the fees towards this work," Nadia Grant, head of global equities, said in an interview with Pensions & Investments.
Grant also expects to see "resiliency" in the strategy's performance, even as similarly classed European sustainability funds record outflows.
In the fourth quarter, investment strategies labeled as ESG-linked under the European Union's Article 8 criteria — the same label as BNP PAM’s new fund — registered their largest quarterly outflows on record, a net €26.7 billion ($29.2 billion).
Grant stressed that the strategy is different, as it has a structure that can outperform due to its tracking of broader indexes while also identifying alpha opportunities. Grant will also act as portfolio manager for the fund.
The strategy was created as one of the few active equity funds in the market with net-zero alignment as a primary objective, BNP PAM said in a news release. The portfolio is diversified across sectors and regions with a broad investment universe and little-to-no significant style, regional or sector tilt.
The strategy commits to having at least half of its investments classified as sustainable by BNP PAM's metrics, though Grant stressed that all companies or stocks held by the fund would need to have a “credible” net-zero plan as verified by the Science Based Targets initiative.
