Franklin MSCI China Paris Aligned Climate UCITS ETF USD Acc

Issuer: Franklin Templeton

Asset Class: Equity

TER: 22bps

Trading Currency: USD

Pays Income: False

Listing Date: 17 Jun 2022

Ticker: PABC

ISIN: IE000EBPC0Z7

This fund offers targeted exposure to the Chinese equity market while strictly adhering to the decarbonisation objectives outlined in the Paris Agreement. The investment strategy is designed to closely replicate the performance of a Paris-Aligned Benchmark, which systematically reduces exposure to carbon-intensive companies and increases allocations to firms that are transitioning towards a low-carbon economy. The portfolio is constructed by selecting large and mid-capitalisation stocks from the broader Chinese market and then re-weighting them based on their climate credentials, including their carbon footprint and efforts to manage climate-related risks and opportunities.

The underlying index employs a rigorous methodology that goes beyond simple exclusions. It aims for a minimum 50% reduction in greenhouse gas intensity compared to the parent universe and an annual decarbonisation target of at least 7%. This ensures the portfolio is aligned with the trajectory required to limit global warming to 1.5°C. Furthermore, companies involved in controversial weapons, severe social norm violations, or those deriving significant revenue from fossil fuels are excluded, integrating a broader ESG framework into the climate-focused approach.

This product is tailored for investors seeking to participate in China's economic landscape while actively contributing to climate action. It provides a transparent, rules-based solution to decarbonise an equity portfolio and mitigate long-term climate transition risks. By focusing on companies that are better positioned for a sustainable future, the fund offers a way to align investment goals with global environmental priorities, providing a core holding for a climate-conscious investment portfolio focused on emerging markets.