BlackRock has launched the World ESG Insights Equity Fund, a new strategy designed to simplify ESG investing and provide quality data to investors.
The product is underpinned by BlackRock’s proprietary ESG assessment framework, which is designed to overweight companies it believes may benefit over time from a focus on capturing ESG risks and opportunities, while also aiming for a 50 percent reduction in carbon intensity compared to the FTSE Developed Index.
The framework assesses ESG data from multiple sources to effectively assess materiality, aggregating them into 15 proprietary sustainable descriptors that encompass ESG issues. These descriptors are mapped against a sector-specific materiality matrix to produce a score for each company in order to maximise the portfolio’s ESG profile.
The 15 descriptors are captured in the main themes, which are:
• Environment - considers a company’s exposure and management of risks and opportunities associated with a transition to a lower carbon economy.
• Social - considers issues that reflect how corporations interact with both their internal (workforce) and external (community, supply chains) stakeholders.
• Governance - focuses on corporate governance structures and behaviours that allow companies to better manage changes in technological, social, environmental and regulatory conditions.
The fund will also employ detailed and regular reporting, including ESG and Carbon metrics, aligned to the UN’s Sustainable Development Goals and the Paris Agreement.
It will be managed by Jonathan Adams and Andre Bertolotti, who will draw research insights from BlackRock’s Sustainable Investing team.
Commenting on the thinking behind the freshly unveiled fund, Tom Fekete, head of sustainable investment solutions for EMEA and APAC, explained: “Our recent sustainable investing survey indicates a lack of quality data is what’s holding investors back from increasing their exposure to sustainable investments. This fund helps to bridge that gap by offering investors access to BlackRock’s proprietary ESG views and risk management, to better position their core allocations against sustainable risks and opportunities.”
Sarah Melvin, head of UK at BlackRock, added: “With the significant reallocation of capital to companies with more sustainable practices already under way, pension schemes, insurers, and wealth platforms are asking for our help to realise this historic investment opportunity. This launch marks another milestone in our sustainability offering to help savers build their pension and long-term investments in companies with a positive ESG profile.”
