Amundi is set to tighten exclusionary criteria on its S&P 500 ESG ETF after swapping the current index for a more stringent equivalent next month.
Effective 19 December, the $2.7bn Amundi S&P 500 ESG UCITS ETF (S500) will switch from tracking the S&P 500 ESG index to the S&P 500 ESG+ index which was issued on 30 May.
Like the outgoing index, the ESG+ benchmark aims to mirror the performance of the S&P 500 by ranking all companies according to their S&P Dow Jones Indices ESG score and then capturing the top-scoring 75% of companies from each GICS sector.
However, the incoming index has a higher exclusionary watermark, removing all companies deemed UN Global Compact non-compliant versus the worst 5% of UNGC scoring for the outgoing benchmark.
It also applies more stringent business involvement exclusions such as halving the revenue thresholds for contracting for integral military weapons and tobacco product and services to 5% as well as new criteria allowing no more than 5% revenue exposure to shale oil and gas or Arctic drilling extraction and production.
The resulting ESG+ index captures a slightly narrower 296 constituents versus 305 for the outgoing benchmark.
S500 is classified as Article 8 under the Sustainable Finance Disclosure Regulation. Amundi did not announce plans to change this following the index switch.
Last week, the firm downgraded its entire €19bn Paris-Aligned Benchmark (PAB) and Climate Transition Benchmark (CTB) ETF ranges.
In July, Amundi expanded its suite of S&P 500 ESG exposures with the launch of the Amundi S&P 500 Equal Weight ESG Leaders UCITS ETF (WELE).
