Legal & General Investment Management has launched the L&G ESG Paris Aligned World Equity Index Fund.

The fund integrates Paris-aligned reductions in carbon emissions and UN Sustainable Development Goals and incorporates LGIM’s proprietary ESG scores

LGIM says the fund has gained support from institutional investors including London Borough of Newham Pension Fund which has invested approximately £520m, and Irish pension investors. Classified as Article 9 under the EU Sustainable Finance Disclosure Regulation, the fund will track the performance of the Solactive L&G Developed Markets Paris Aligned ESG SDG Index. It will applying the following constraints:

50% reduction in greenhouse gas (GHG) emissions intensity
7% greenhouse gas (GHG) intensity reduction on average per annum
Exposure to ‘high impact sectors’ aligned at least to the exposure of the parent index
100% increase in green revenues relative to the universe/parent index

The fund also incorporates both PAB and UN SDG exclusions on companies involved in activities such as controversial weapons and tobacco production, as well as companies whose revenues are disproportionately weighted towards coal mining and power generation, fossil fuels, and electrical power generation from fossil fuels.