Legal & General Investment Management (LGIM) has expanded its suite of Paris-aligned equity ETFs with two new funds focused on stocks listed in Japan and in developed market countries of the Pacific region, excluding Japan.

LGIM offers a further two Paris-aligned equity ETFs targeting US and European stock markets.

The L&G Japan ESG Exclusions Paris Aligned UCITS ETF (RIJP) and L&G Asia Pacific ex Japan ESG Exclusions Paris Aligned UCITS ETF (RIAP) have been listed on London Stock Exchange in US dollars and pound sterling, on Deutsche Börse Xetra in euros, and on SIX Swiss Exchange in Swiss francs.

The funds are linked to indices developed by Foxberry – namely the Foxberry Sustainability Consensus Japan Index and Foxberry Sustainability Consensus Pacific ex-Japan Index – which are constructed from initial universes comprising large and mid-cap stocks within their target markets.

The indices utilize a committee-based approach to identify companies that pass a range of ESG exclusion guidelines related to environmental, governance, sustainability, workplace equality, and ethical concerns, as well as adherence to UN sustainable development goals and business-practice norms.

The methodology is also tailored to satisfy the requirements for EU Paris Aligned Benchmarks. Specifically, this entails removing firms involved in controversial weapons and tobacco as well as companies that derive significant revenue from weapons, coal, fossil fuels, natural gas, and high-carbon-emitting electricity production.

Index constituents are then weighted so as to achieve an immediate 50% reduction in carbon intensity and fossil fuel reserves relative to the initial universe as well as a further 7% annual decarbonization going forward, aligning with a trajectory to limit global warming to 1.5°C above pre-industrial levels by 2050.

Each ETF comes with an expense ratio of 0.16%.

The funds join LGIM’s existing two Paris-aligned ETFs which were unveiled in June and target stocks listed in the US and in developed countries from Europe. The L&G US Equity Responsible Exclusions UCITS ETF (RIUS) and L&G Europe Equity Responsible Exclusions UCITS ETF (RIEU) have expense ratios of 0.12% and 0.16%, respectively.

Aanand Venkatramanan Head of ETFs, EMEA at LGIM, commented: “The launch of these two new Paris-aligned ETFs is a demonstration of our continued commitment to providing investors with access to a range of strategies that account for ESG risk, an aspect that has become increasingly important for clients. We are pleased to bring this unique investment proposition to the market, which combines our ETF expertise and our leadership on climate and responsible investing.”