BlackRock has expanded its sustainable investment platform with the launch of the iShares Global Green Bond ETF (BGRN) to help investors pursue a measurable environmental impact from their investments.
BGRN offers exposure to hundreds of investment grade green bonds whose proceeds are applied toward projects with environmental benefits.
“This fund simplifies access to green bonds, enabling investors to more precisely match their values to their investment portfolios,” says Carolyn Weinberg, iShares Global Head of Product at BlackRock. “Issuers of green bonds disclose how their projects are achieving the promised environmental outcome, which will allow us to provide our clients with fund level impact reporting. BGRN can be positioned in the core of a global bond allocation or as a satellite in a diversified fixed income portfolio to achieve greater environmental impact.”
Green bonds are issued to fund projects or activities that have a positive impact on the environment. Supranational organisations, banks, corporations and governments have increasingly recognised green bonds as an essential tool to finance climate-related and other environmental projects. To date, more than USD500 billion in green bonds have been issued globally.
BGRN sets a new precedent for green bond ETFs. It’s the lowest-cost green bond ETF option in the US at 25 bps, with a 5 bps waiver2. And it also seeks to track a US dollar-hedged underlying index, the Bloomberg Barclays MSCI Global Green Bond (USD Hedged) Index. The index hedges any foreign currency exposure back to the US dollar.
“The green bond market allows investors to direct funding toward environmentally beneficial projects while maintaining their fixed income asset allocation,” says Ashley Schulten, Head of Responsible Investing for Global Fixed Income at BlackRock. “This should help broaden support for the green bond market and thus, the needed projects it is funding.”
BlackRock is an industry leader and Executive Committee member of the Green Bond Principles that promote green bond market guidelines to support issuers in transitioning their business model towards greater environmental sustainability through specific projects. BlackRock is also a member of the Climate Bonds Initiative, an international, investor-focused not-for-profit focused on mobilising the USD100 trillion bond market for climate change solutions. The firm owns and manages more than USD8 billion in green bonds allocated to different portfolios.
