Many ETFs now include extra-financial criteria to allow individuals to give more meaning to their savings. Explanation.
ETFs (Exchanged Traded Funds), also called trackers, are gradually becoming essential for investors, including those keen to take into account environmental, social and governance (ESG) criteria. Products whose fees and performance are similar over the long term to traditional ETFs.
As proof, last year, the European ETF market posted inflows of 143.9 billion euros, according to a study published by Morningstar. And, ESG products represented 29% of these total flows, says Jose Garcia Zarate, associate director of passive strategies at Morningstar.
The choice is vast
It must be said that these funds listed on the stock exchange, which replicate the performance of a stock market index, both up and down, are increasingly attractive to investors, in particular thanks to their reduced management fees compared to a traditional UCITS.
In addition, it is possible to buy and sell them in real time on the stock market at any time and thus have immediate liquidity, while diversifying your investments and therefore mitigating risks, as Lorraine Sereyjol-Garros, manager, reminds me. overall development of ETFs and index funds at BNP Paribas Asset Management. Currently, more than a thousand trackers specializing in ESG themes are available on the European market.
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Targeting Article 9 ETFs (SFDR)
However, you should remain vigilant before investing in these products. Indeed, the term ESG is sometimes misused by certain professionals. To put all the chances on your side, the easiest way is to refer to the European regulations for sustainable finance, through the SFDR (Sustainable Finance Disclosure Regulation) classification, based on the degree of consideration of ESG criteria.
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To choose a green ETF, you should choose an ETF falling under Article 9, presented as the most virtuous by the regulator. You can find this mandatory information from your financial intermediary or in the prospectus of the ETF in which you wish to invest.
Products accessible in tax envelopes
In this logic, it is also possible to turn to thematic ESG ETFs, offering an investment strategy linked to sustainable development, such as the reduction of carbon emissions, green hydrogen, and the preservation of biodiversity. , saving the oceans, the circular economy, or even green real estate, like at BNP Paribas for example.
Whether thematic or general, ESG ETFs are accessible to investors through a simple securities account. But, it is also possible to invest in these products through different tax envelopes, whether it is a stock savings plan (PEA), a retirement savings plan (PER) or even a life insurance contract.
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