Amundi is partnering with two Oxbridge colleges to develop a customised low-carbon ESG index strategy that will be open to charities and endowment funds.
This follows Amundi’s recently unveiling of its first index strategies aligned to the 2°C goals of the Paris Agreement.
Working alongside Clare College, Cambridge, and Corpus Christi College, Oxford, the European asset manager has now set up the Amundi ESG Global Low Carbon Fund, which seeks to replicate the performance of the MSCI All Country World Index while incorporating a number of ESG focused objectives.
This includes the removal of all fossil fuel reserves including thermal coal within the portfolio, a reduction in exposure to controversies that could taint the perception of the fund, and a significant improvement in green revenues alongside a reduction in carbon emission intensity.
Intended as a cost-effective index-tracker, the strategy could provide improved sustainability to address the financial risk of climate change. The fund monitors value factor exposure, to ensure it does not deviate significantly from the benchmark and to reduce the risk of any unintended bias.
Clare College will transition all of the endowment fund’s equity allocation to this new strategy as part of their plans to achieve zero carbon and reduce the long-term risk of stranded assets. It will also seed the fund, which was developed by Amundi in collaboration with bursars from a number of University of Cambridge and University of Oxford Colleges
Amundi and the Oxford and Cambridge College investment teams will work together to ensure it continues to be positioned to seek to deliver optimal risk-adjusted returns. Consequently, its teams will evolve the fund over time in response to the ever-changing ESG investment landscape.
Paul Warren, bursar of Clare College, Cambridge, said: “Clare College is passionate about achieving the best possible returns for the endowment to ensure we can continue to support our diverse student population to achieve their potential. Transitioning our equity allocation to this solution will play an important role in delivering this objective by reducing our climate-risk exposure. Amundi was carefully selected based on its flexibility, experience managing climate solutions and indexing expertise.”
Ashley Fagan, head of ETF, indexing, smart beta strategy and business development for UK & Ireland – Amundi, added: “We are delighted to be working with the Oxford and Cambridge colleges to launch and manage a bespoke ESG index solution to meet the needs of the endowments. The strategy we have developed together offers UK endowments, charities and professional investors a simple
