ESG ETFs

Keen to see some ethical etfs added please

Some interesting developments in this area in the latest Blackrock client letter, including:

"We want to make sustainable investing more accessible to all investors and lower the hurdles for those who want to act. We have advocated for clear and consistent naming conventions for ESG products across the industry, so that investors can make informed decisions when they invest in a sustainably labeled fund. We have been working to improve access for several years – for example, by building the industry’s largest suite of ESG ETFs, which has allowed many more individuals to more easily invest sustainably. And we are committed to doing even more:

  • Doubling Our Offerings of ESG ETFs – We intend to double our offerings of ESG ETFs over the next few years (to 150), including sustainable versions of flagship index products, so that clients have more choice for how to invest their money.

  • Simplifying and Expanding ESG iShares, Including ETFs with a Fossil Fuel Screen – In addition to more choice, clients have asked for a simpler way to integrate ESG in their existing portfolios. To meet that need, we will have three ESG ETF suites in the US and EMEA: one that enables clients to screen out certain sectors or companies that they do not want to invest in; one that enables clients to improve ESG scores meaningfully while still optimizing their ability to closely track market-cap weighted indexes; and one that enables clients to invest in companies with the highest ESG ratings and features our most extensive screens including one for fossil fuels. We will be providing additional information on these product lines later this quarter.

  • Working with Index Providers to Expand and Improve the Universe of Sustainable Indexes – To provide more sustainable investment options for our clients – and all investors – we are engaging with major index providers to provide sustainable versions of their flagship indexes. We also will continue to work with them to promote greater standardization and transparency of sustainability benchmark methodology. We believe that ESG benchmarks should exclude businesses with high ESG risk such as thermal coal and we are engaging with index providers on this topic.

  • Expanding Sustainable Active Investment Strategies – BlackRock will be expanding our range of active strategies focused on sustainability as an investment outcome, including funds focused on the global energy transition, and impact investing funds that seek to promote positive externalities or limit negative ones.

    • Global Energy Transition – BlackRock currently manages $50 billion in solutions that support the transition to a low-carbon economy, including an industry-leading renewable power infrastructure business, which invests in the private markets in wind and solar power; green bond funds; LEAF, the industry’s first environmental sustainability-focused cash management strategy; and circular economy active strategies, which invest in businesses focused on minimizing waste and leveraging the full life cycle of materials. We will be expanding dedicated low-carbon transition-readiness strategies, offering investors exposure to the companies that are most effectively managing transition risk.

    • Impact Investing – BlackRock recently brought on board a leading impact investing team that offers clients alpha through a portfolio of companies chosen on their measurable, positive impact to society. We are committing to launching dedicated impact investing solutions, beginning with the launch of our Global Impact Equity fund this quarter. Our impact investing solutions will be aligned with the World Bank’s IFC Operating Principles for Impact Management."

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Large corporates will be moving significant amounts to ESG funds, it’s a big opportunity. Looks like a big increase here at Freetrade as well. They could really capture this space being the only zero fee stockbroker offering ETF’s.

"Our overwhelmingly millennial customer base has invested heavily in ESG [environmental, social, and governance] stocks, with over ​20%​ holding green energy stocks today. That’s a big jump from the ​4.6%​ we saw earlier this year,” Adam Dodds, chief executive and founder at Freetrade, said.

https://www.moneymanagement.com.au/news/financial-planning/green-energy-dominated-millennial-investing-2019

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ESG is a matter of interpretation though. My pension provider offers an ESG fund and it is a who-is-who of the least ESG companies. Nestle is the biggest holding in that one…