BlackRock has brought a trio of ESG ETFs to the market as it continues in its bid to make sustainability its standard for its investing clients
It has launched the iShares MSCI EMU SRI UCITS ETF (SMUA), iShares $ Corp Bond ESG UCITS ETF (SUOU) and iShares Smart City Infrastructure UCITS ETF (CITY), with two of these being ESG versions of existing flagship iShares UCITS ETFs.
SMUA will provide exposure to companies within the European Monetary Union stock market with the highest ESG scores, tracking the MSCI EMU SRI Select Reduced Fossil Fuel index and acting as an alternative to the iShares Core MSCI EMU UCITS ETF.
Meanwhile, SUOU is an ESG alternative to the flagship $6.8bn iShares $ Corp Bond UCITS ETF, offering exposure to investment grade US dollar-denominated corporate bonds with high MSCI ESG ratings. It tracks the Bloomberg Barclays MSCI US Corporate Sustainable SRI index.
Finally, CITY is a thematic product, which BlackRock said aims to capitalise on the opportunities presented by the new generation of smart megacities offering sustainable ways of living, in the wake of the global migration from the countryside to cities. It tracks the STOXX Global Smart City Infrastructure index, which also incorporates ESG screening criteria for certain sectors, risks and controversies.
The ETFs carry a TER of 0.2%, 0.15% and 0.4% respectively.
Stephen Cohen (pictured), head of iShares EMEA at BlackRock, said: “Just as investors have embraced index investing for efficient, transparent and scalable market exposures in traditional portfolios, ETFs are enabling investors to actively pursue sustainability objectives and take control of their investment outcomes. Providing ESG equivalents to our flagship products, while providing innovative thematic products will further steepen the ETF adoption curve, as investors seek out the most efficient market exposure tools with which to navigate markets.”
In January, BlackRock committed to doubling its offering of iShares ESG ETFs and index funds by the end of 2021, while also declaring it will make sustainability its “new standard” for investing following growing criticism over its failure to address climate-related risks. In its annual letter to clients, BlackRock, which manages $7trn of assets, surprised the investment world by announcing it will overhaul its current strategy and bring in a raft of new changes to drive ESG integration across its investment processes.
The changes include ditching investments the firm perceives a sustainability risk, including thermal coal producers, as well launching sustainable versions of its flagship index products.