Amundi increases sustainable investments levels on 46 ETFs

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Amundi is increasing the minimum proportion of sustainable investments on 46 of its exchange traded funds following some clarifications of EU sustainability disclosure rules.

The biggest increases will see the percentage of sustainable investments in some ETFs go from 1 per cent to 35 per cent and from 10 per cent to 40 per cent, according to Europe’s largest listed asset manager.

For example, the Amundi CAC 40 ESG ETF had a previous minimum of 1 per cent sustainable investments, which is being increased to 35 per cent.

In another case, the Amundi Index MSCI EMU SRI PAB ETF (SRHE) will see its minimum sustainable proportion go from 10 per cent to 40 per cent.

Following the changes, all 46 of the affected ETFs will have at least 5 per cent of their holdings in sustainable investments.

The move follows a review of what Amundi says was its initial “cautious approach” in November 2022, when it committed its article eight funds to include a minimum of sustainable investments from January 2023.

Article eight funds under the Sustainable Finance Disclosure Regulation (SFDR) must promote sustainable or environmental characteristics but do not have sustainable investing as a core objective.

Amundi’s cautiousness at that time was, it said, “due to the uncertainty regarding the definition of sustainable investments and intended to limit the risk for investors and distributors”.

The fund house’s recent review and changes follow clarifications, in the nine months since its initial decision making, from EU regulators about what constitutes sustainable investments under SFDR.

“Some progress has been made and following our discussions with a number of industry stakeholders, [including] regulators, asset managers [and] data providers, we decided to update these ETFs’ minimum sustainable investment commitment levels,” Amundi said.

The move is “to help our clients better assess the actual sustainable investment profile of our ESG ETFs”, it added.

Amundi ETFs initially committed to conservative minimum sustainable investment figures, of 0 per cent to 10 per cent, except one Green Bonds Govies ETF that was classified article nine, the strictest SFDR standard, with a minimum sustainable investment of 90 per cent.

Amundi maintains a “relatively cautious stance” by positioning the minimum sustainable investment commitment level “significantly lower” than the realised sustainable investment figures calculated for these ETFs, the asset manager said.

Minimum sustainable investment commitments have to be set so the realised sustainable investments are above that minimum.

In line with regulations, the realised sustainable investment has to be calculated by the asset manager using a unified methodology, across its entire active and passive product range.

The updates, which are effective from August 31, do not represent a change of the investment objective or the investment policy of the funds, Amundi said in a statement, and there are also no changes in the ETFs or their underlying indices.

Additional reporting by Jessica Tasman-Jones.

*Ignites Europe is a news service published by FT Specialist for professionals working in the asset management industry. Trials and subscriptions are available at igniteseurope.com.