BlackRock has launched five iShares MSCI Climate Transition Aware Ucits ETFs providing investors access to companies leading in the transition to a low carbon economy.
The ETFs offer investors tools to build sector-neutral equity portfolios, leveraging global and regional assets while managing the risks and opportunities of the low-carbon transition. This shift is a major market force identified by BlackRock, driven by technological innovation, geopolitical changes and ageing populations.
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Manuela Sperandeo, BlackRock’s Europe and Middle East head of iShares Product, said: “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 includes companies based on three criteria: setting greenhouse gas emissions reduction targets approved by the Science Based Targets initiative, deriving at least 20% of their revenues from green activities, or ranking in the top 50% of their sector for greenhouse gas emissions intensity, provided they have published emission reduction targets.
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The index methodology also screens out companies with ‘very severe’ MSCI ESG Controversies and companies not in compliance with the UN Global Compact Principles. Also excluded are companies involved in controversial weapons, tobacco, thermal coal mining, thermal coal power generation and unconventional oil and gas extraction.
Within the energy, materials, industrials and utilities global industry classification standard sectors, additional exclusions apply based on emissions intensity and those without targets or reporting. The fund range’s exclusions meet the exclusion criteria of the EU Climate Transition Benchmarks.
Sebastian Lieblich, MD, head of Emea index products, MSCI, commented: “Clarity on the commitments of businesses to reduce their carbon footprint through published targets, as well as their revenues from green businesses, are key in this process. The MSCI Transition Aware Select Indexes methodology can play a central role for investors looking to factor these parameters in their decision making.”
