BlackRock announced that it has launched the iShares Developed World Fossil Fuel Screened Equity Index Fund, in close collaboration with Oxford University Endowment Management (OUem), following the investment company’s selection to create a fund meeting OUem’s sustainability goal of divesting from fossil fuel companies.
In April 2020, Oxford University announced landmark plans to divest its endowment formally from fossil fuels. Following the announcement, worked to identify an equity investment product that fits with the resolution to divest from fossil fuels for the University’s Capital Account, while also keeping its existing portfolio composition in liquid index equity and bond mandates.
According to BlackRock, the firm was awarded the mandate following its commitment communicated to CEOs earlier this year to make sustainability its standard for investing, and due to the firm’s capabilities in developing innovative products and solutions which help clients achieve their own sustainable investment objectives.
BlackRock stated that it worked with data and index provider MSCI to design a custom MSCI World Select Fossil Fuel Screened Index. The new index utilizes an exclusionary methodology which results in a significant screening out of companies directly involved in fossil fuel extraction, production and exploration as well as those owning fossil fuel reserves. BlackRock also applied its baseline screens to avoid exposure to certain companies or sectors associated with controversial nuclear and civilian weapons, tobacco, thermal coal, tar sands and companies that are not compliant with the United Nations Global Compact principles.
Sarah Melvin, Head of UK at BlackRock, said:
“Oxford University Endowment Management is at the forefront of sustainable investing. Given their leadership in sustainability, we are excited to have been chosen by OUem, to design and launch a new product, the iShares Developed World Fossil Fuel Screened Equity Index Fund, which incorporates precise, transparent, exclusionary screens supporting their divestment objectives. The launch of this new Fund underscores our commitment to helping our clients build well-constructed portfolios that are critical to achieving their long-term sustainability goals.”
Sandra Robertson, CEO and CIO of Oxford University Endowment Management, said:
“Investing sustainably is wholly integrated in our company culture and investment process at OUem. In the actively managed Oxford Endowment Fund, for permanent endowment, over the past 12 years we have effectively divested from fossil fuels, and we have funded several innovative groups investing in solutions to climate change. This is an outcome of an active investment process, and a long-term investment theme of resource efficiency. We wanted to similarly design an equity index solution that reflects this ambition in the University’s Capital Account. With BlackRock, we have taken a strong policy statement and created an investment product that produces meaningful action, to invest in a more sustainable way.”