BNP Paribas : Change your investment perspective by considering their carbon footprint

BA: The main reservation stems from the fact that it is not easy for institutional investors to deprive themselves of stocks in oil companies, whose profitability and dividends remain high. In addition, a carbon-free portfolio suffers by construction from a sector bias compared with a comparable traditional index, which certain investors may find difficult to accept, particularly institutional investors.

That said, over ten years, the Low Carbon 100 Europe® NTR index has outperformed by 20.75% the Stoxx Europe 600® NR index, a traditional index on European equities to which it may be compared. A fund consistent with the 2°C scenario of the Paris Agreement may therefore be both meaningful and a performance driver!*

Furthermore, the Norwegian sovereign fund, with assets under management of USD 1,000 billion, announced in March that it was exiting the oil and gas exploration and production sector. If other large institutional investors are inspired by this and the trend continues, we may think that oil stocks will suffer as a result, and that this will not only have no impact on carbon-free UCITS but will even facilitate their performance through a knock-on effect. The last remnants of reluctance among institutional investors could even disappear on their own!