The global momentum towards a net zero economy continues to drive demand for sustainable investment strategies, and BlackRock has committed to facilitate this transition with a set of investment options with explicit temperature alignment goals.
The global momentum towards a net zero economy continues to drive demand for sustainable investment strategies, and BlackRock has committed to facilitate this transition with a set of investment options with explicit temperature alignment goals.
In line with this commitment, BlackRock has today launched two exchange traded funds (ETFs) that aim to help investors align their portfolios with the objectives of the Paris Agreement – the international agreement to limit global warming to 1.5°C above pre-industrial levels.
The iShares S&P 500 Paris Aligned UCITS ETF (UPAB) and the iShares MSCI World Paris Aligned UCITS ETF (WPAB), are designed to mitigate exposure to transition and physical climate risks, capture opportunities arising from the transition to a lower-carbon economy, and screen out exposure to businesses involved in activities such as oil and gas, thermal coal, controversial weapons, high carbon electricity generation and social norm violators.
The newly launched products are categorized as Article 9 under the European Union’s Sustainable Finance Disclosure Regulation (SFDR), in line with BlackRock’s expectation that 70 per cent of its fund launches and repositionings in Europe this year qualify for Article 8 or 9.
Manuela Sperandeo, BlackRock’s EMEA Head of Sustainable Indexing, says: “As the low-carbon transition continues to transform market return expectations, we believe clients are best served by being at the forefront of that transition. This will require investors to embrace new strategies, and ETFs are playing a central role as foundational building blocks for people seeking out affordability, transparency, and convenience. Our focus remains on providing a broad and deep set of sustainable investment tools that help investors make informed choices.”
These launches come as the iShares Sustainable UCITS range crosses USD50bn in assets, with Q1 2021 inflows of USD10bn almost tripling the pace of asset gathering in the same quarter of 2020. 17 Funds out of the 50 available Sustainable UCITS ETFs now have over USD1 billion in assets, up from only three funds a year ago.
BlackRock now globally manages more than USD200 billion in long-term sustainable strategies, with global sustainable assets across active, index, and alternative asset classes doubling from the USD100 billion gathered at the end of March 2020.
