Lyxor has cross-listed its Lyxor S&P Global Developed Paris-Aligned Climate ETF on Nasdaq Stockholm and Borsa Italiana.

The Lyxor S&P Global Developed Paris-Aligned Climate ETF has been cross-listed in Stockholm (pictured) and Milan.

The fund provides global developed market equity exposure with a significantly reduced carbon footprint in accordance with the Paris Agreement – a framework to avert dangerous climate change by limiting global warming to below 2°C.

It tracks the S&P Developed Ex-Korea LargeMidCap Paris-Aligned Climate Index which bases its construction on criteria set out by the EU’s Technical Expert Group on Sustainable Finance (TEG) in order to reallocate to firms most in line with the transition to a low-carbon and climate-resilient economy.

The TEG sets out standards for companies reporting ESG-related disclosures as well as for the construction of climate benchmarks. Its framework aims to reduce the risk of ‘greenwashing’ – the process of conveying a false impression about how a company’s products are more environmentally sound.

The methodology first screens the parent S&P Developed Ex-Korea LargeMidCap Index to exclude companies involved in controversial weapons and tobacco, embroiled in ESG controversies, or in violation of UN Global Compact principles. Additionally, firms with significant revenue exposure to the exploration or processing of coal, oil, and natural gas are also removed.

Using data from Trucost, a business of S&P Global, the index determines the carbon intensity of each remaining stock using greenhouse gas emissions for the entire value chain of that company.

An optimization process reweights constituents so as to reduce the total carbon intensity of the index by 50%, instantly aligning it with the Paris Accord objective to cut emissions by 50% by 2030. The optimization process also seeks to minimize the deviations in constituent weights relative to the parent universe.

Furthermore, the index strives for at least a 7% annual decarbonization moving forward. These requirements may be adjusted according to new characteristics set out in future EU delegated acts.

The ETF currently houses approximately $50 million in assets under management across listings on London Stock Exchange, Xetra and SIX Swiss. Income is accumulated within the portfolio.

It trades on Nasdaq Stockholm in Swedish krona (LYXPAB SS) and on Borsa Italiana in euros (PABWD IM).

The fund comes with an expense ratio of 0.20%.