Ircantec picks Amundi and BNP Paribas AM for $1.86bn climate mandates

France's Ircantec has awarded three seven-year equity index mandates totaling nearly $1.86 billion to Amundi and BNP Paribas Asset Management, ESG News reported. The agreements cover European and global equities and carry climate and responsible investment requirements that ESG News describes as strict.

The allocation splits three ways: two European equity index funds of roughly $465 million each go to the managers separately, and Amundi also takes a global equity index fund of about $930 million. Amundi's two mandates total about $1.395 billion against $465 million for BNP Paribas AM. ESG Capital Daily previously reported the same mandates in euro terms at nearly €1.6 billion.

Each of the three portfolios tracks a customized MSCI SRI index that incorporates Ircantec's responsible investment charter and its climate objectives.

Every fund must hold a carbon footprint at least 50% below its reference benchmark at all times and follow the scheme's 7% annual decarbonization trajectory. Ircantec also requires exposure to high-impact sectors to remain at least equivalent to benchmark levels, which ESG News says is meant to prevent managers from achieving lower reported emissions simply by avoiding carbon-intensive industries.

The sector-exposure floor means a portfolio can hold high-emitting sectors at benchmark weight while still reporting half the benchmark's carbon footprint.

Ircantec manages more than $19.8 billion in financial market investments and adopted its 1.5°C alignment strategy in 2021. The scheme aims to phase out fossil fuel investments by 2030 and reduce financed emissions from portfolio companies by an average of 7% a year through 2050.