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BlackRock Creates Largest Climate Exchange Traded Fund Scope

File Photo: The BlackRock logo is painted on May 25, 2021 outside of its headquarters in the Manhattan district of New York City, NY, USA.Reuters / Carlo Allegri

October 26, 2021

Simon Jessop

London (Reuters) -Asset manager BlackRock agreed on Tuesday with stricter rules for managing six existing funds with $ 9 billion in assets, followed by a climate-friendly exchange-traded fund (EFT). Said that it created the largest range of.

Following discussions with BlackRock, the MSCI Index, which supports the scope of BlackRock’s iShares ESG Enhanced UCITS ETFs, was established to curb global warming at 1.5 degrees Celsius (2.7 degrees Celsius), which exceeds pre-industrial standards. Follows the European Union Climate Change Benchmark.

The CTB needs to reduce carbon intensity (a measure of emissions to revenue) by 30% compared to the MSCI benchmark and decarbonize the benchmark itself by 7% year-on-year.

For the first time, it includes Scope 3 emissions that cover emissions generated by the use of the company’s products, as well as those produced by the company itself.

In addition to CTBs, BlackRock said more stringent environmental filters will be applied when deciding what to include in ETFs. This will expand the exclusion of oil sands to include a wider range of non-traditional oil and gas activities.

The fund excludes companies that earn more than 5% of their revenues from oil sands, shale gas, shale oil, coal seam gas, coal bed methane, and onshore / offshore reserves in the Arctic.

The “Environmental Damage” screening will also apply from November 2022 to companies facing serious or very serious disputes over environmental issues such as land use, biodiversity, toxic spills and water management. Said he said.

Unlike the scope of BlackRock’s iShares MSCI World Paris Arind Climate UCITSETF Fund, drill down into each constituent to ensure they are in line with the goals of the Paris Agreement on Climate. Enhanced funds seek to achieve the same goals at the portfolio level. ..

As a result, the number of shares that can be included in each fund is 1,385 compared to 685, more than double that of the Paris affiliated fund.

This allows the fund to have a risk-return profile that is much closer to the parent index, potentially more for wealth managers who want to invest more sustainably but are worried about deviating from their parent’s returns. attractive.

(Report by Simon Jessop, edited by Barbara Lewis)



BlackRock Creates Largest Climate Exchange Traded Fund Scope

Source link BlackRock Creates Largest Climate Exchange Traded Fund Scope

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