Franklin S&P 500 Paris Aligned Climate UCITS ETF
| Issuer: Franklin Templeton |
| Asset Class: Equity |
| TER: 7bps |
| Trading Currency: GBP |
| Pays Income: False |
| Listing Date: 31 Jul 2020 |
| Ticker: 500P |
| ISIN: IE00BMDPBZ72 |
This fund offers a way to invest in large-cap U.S. companies through a climate-conscious lens, providing exposure that aligns with the objectives of the Paris Agreement. It physically tracks the S&P 500 Paris-Aligned Climate Index, which is designed to meet the minimum standards for European Union Paris-Aligned Benchmarks (PAB). The portfolio is constructed to support a 1.5°C global warming scenario by significantly reducing its overall greenhouse gas (GHG) emissions intensity compared to the traditional S&P 500. This is achieved by systematically screening and re-weighting constituents to favour companies that are better positioned for the transition to a low-carbon economy.
The underlying index applies a series of exclusions, removing companies involved in controversial weapons, tobacco, and those failing to comply with United Nations Global Compact principles. Crucially, it also divests from firms with significant business activities in fossil fuels such as thermal coal, oil, and gas. The remaining companies are then evaluated and re-weighted based on their climate performance. This methodology increases exposure to companies with lower carbon footprints and those with a clear path towards decarbonisation, while also aiming to limit exposure to physical climate risks. The result is a portfolio that is at least 50% less carbon-intensive than the standard market benchmark.
This product is suitable for investors seeking core U.S. equity exposure while integrating stringent environmental, social, and governance (ESG) criteria into their investment strategy. It allows for participation in the growth of leading American companies while actively supporting the global transition to a more sustainable economy. By focusing on firms that are adapting to climate-related challenges and opportunities, the fund may offer enhanced resilience against climate transition risks. It provides a transparent, rules-based approach for investors to align their capital with long-term climate goals without forgoing broad market diversification.
