BlackRock has launched a suite of UCITS ETFs designed to help investors access companies with forward-looking science-based targets that generate green revenues.
The five iShares MSCI Climate Transition Aware UCITS ETFs aim to provide investors with tools to build equity portfolios that targets sector neutrality, using global and regional building blocks, while mitigating the risks and capturing the opportunities associated with the transition to a low carbon economy.
The funds are:
- iShares MSCI World Climate Transition Aware UCITS ETF
- iShares MSCI Europe Climate Transition Aware UCITS ETF
- iShares MSCI EMU Climate Transition Aware UCITS ETF
- iShares MSCI US Climate Transition Aware UCITS ETF
- iShares MSCI Japan Climate Transition Aware UCITS ETF
In a survey of 200 global institutional clients that BlackRock conducted in June 2023, 56% said they plan to increase their allocations to transition strategies over the next three years, and nearly half said it was their top priority.
Manuela Sperandeo, BlackRock’s Europe and Middle East head of iShares product, said: “Innovation is central to BlackRock’s approach to developing products and solutions for clients, as investors become more sophisticated in their investment objectives. The transition to a low-carbon economy is set to spur a significant reallocation of capital as energy systems and technologies continue to evolve and develop.
“With the launch of the Climate Transition Aware range, we are expanding the choice we offer clients seeking to mitigate the investment risks and capture the opportunities from this transition.”
The MSCI Transition Aware Select Index methodology, which the funds will follow, includes companies that have at least one of the following criteria: a science-based target, approved by the Science-Based Targets initiative; derive at least 20% of their revenues from green revenues; or are in the top 50% of companies per sector in terms of emissions intensity.
It also screens out companies with ‘Very Severe’ MSCI ESG controversies and companies not in compliance with the UN Global Compact Principles. This extends to companies involved in controversial weapons, tobacco, thermal coal mining, thermal coal power generation and unconventional oil and gas extraction.
Additional exclusions apply within the energy, materials, industrials and utilities sectors based on emissions intensity and those without targets or reporting.
