Investment giant BlackRock announced today the launch of the iShares ESG Enhanced Equity UK Index Fund Range, a new series of sustainable index funds targeted at the UK wealth market.
The new investment products include five funds at launch, providing regional and country-specific exposures including Europe, UK, Japan, US, and Pacific ex-Japan. A sixth fund offering exposure to emerging markets is expected to be added in the coming weeks.
According to BlackRock, the launch of the new range addresses a gap in the UK wealth market for indexing-based strategies that help clients make a sustainable transition. The new funds aim to meet both the increasing appetite from investors to embed sustainability into their asset allocation decisions, as well as the accelerating trend of indexing across wealth portfolios.
Manuela Sperandeo, BlackRock’s EMEA Head of Sustainable Indexing, said:
“We are excited to launch this new range of funds which set the standard for sustainable index investing in the UK market. Investors across the country, including pension funds, wealth managers and private banks, are turning to solutions that enable them to incorporate ESG considerations into their standard portfolios. These new sustainable, core index building blocks allow investors to build low-cost, global equity portfolios with the flexibility to adjust exposures according to their asset allocation needs.”
BlackRock worked with Morningstar indexes for the launch, to design a set of ESG equity indices covering global, regional and country-specific exposures. The indices employ a set of exclusionary screens aimed at limiting exposure to a set of controversial activities ranging from firearms production for retail sale to thermal coal extraction, oil sands production and tobacco distribution, among others. The indices also include screens specific to the UK market with categories related to alcohol, gambling and adult entertainment, as well as exclusions based on a severe controversy score from Morningstar company Sustainalytics . Additionally, the new funds also aim to reduce carbon emissions intensity by at least 30%, responding to increasing demand from UK investors for climate aware investment products.
Rob Edwards, Director of Product Management, EMEA & ESG, Morningstar Indexes, said:
“We are thrilled to build on our global collaboration with BlackRock to offer differentiated index-based strategies to help European investors address their growing sustainable investment needs. Our suite of ESG indexes draw on the capabilities of Morningstar Indexes global research team in addition to the underlying ESG ratings of highly respected ESG ratings provider Sustainalytics, also part of Morningstar. In combination with the strength of BlackRock, our indexes represent compelling value for the end investor.”