- Provides global equity exposure for investors committed to reducing their carbon footprint
- CRBN is designed for individuals and institutions interested in environmental sustainability without divestment
- It aims to maintain exposure to global equity, while accounting for carbon exposure
BlackRock has expanded its suite of Environmental, Social and Corporate Governance (ESG)-related products with the launch of iShares MSCI ACWI Low Carbon Target ETF. The new fund which seeks to track the results of the MSCI ACWI Low Carbon Target Index and addresses two dimensions of carbon exposure – carbon emissions and fossil fuel reserves – started trading on the New York Stock Exchange on December 9, 2014.
CRBN is designed for individuals and institutions interested in environmental sustainability without divestment and provides transparency to the carbon footprint of their investments. By overweighting companies with low carbon emissions relative to sales and those with low potential carbon emissions per dollar of market capitalization, it aims to maintain exposure to global equity, while accounting for carbon exposure. Relative to the standard ACWI index, the underlying holdings to the CRBN index produce 81% less carbon emissions and 97% less potential carbon emissions from fossil fuel reserves.
Daniel Gamba, head of BlackRock's iShares Americas Institutional Business, said, “We see a growing demand from global investors who are seeking to invest in way that can have a positive impact on the broader economy without potentially sacrificing returns and to be able to do so with the ease, access and efficiency of an ETF. With iShares MSCI ACWI Low Carbon Target ETF, we are helping investors to look at socially responsible investing through the lens of long-term investment returns and in the process helping them to take action with their portfolios. This is particularly relevant for official institutions, pensions, foundations and endowments who are interested in pursuing environmental sustainability strategies without divestment.”
Carol Boykin, CFA, Representative of the Secretary-General for the investment of the assets of the United Nations Joint Staff Pension Fund, said, “As we consider the impact of climate change worldwide, as highlighted by the UN Secretary-General at his Climate Summit on 23 September, it is clear that investors are now paying close attention to the risk posed to their investments by climate change. The United Nations Joint Staff Pension Fund welcomes the creation of a new lower carbon index and related ETFs as a responsible approach to environmentally sustainable investing and a positive response to the Secretary-General’s call for action.”
Sam Gallo, Chief Investment Officer of the University System of Maryland Foundation, said, “Being able to address socially responsible concerns while maintaining our fiduciary standards is critical to our investment approach. The iShares MSCI ACWI Low Carbon Target ETF is a low-cost, investment solution that allows us to maintain full exposure to global equities while incorporating a carbon exposure reduction strategy.”
Baer Pettit, Managing Director and Head of the Index Business at MSCI, said "Socially responsible investing increasingly influences many of our clients' investment strategies. We are pleased that iShares has again selected MSCI to meet its need for an innovative index."
The MSCI Global Low Carbon Target Index re-weights stocks based on their carbon exposure in the form of carbon emissions and fossil fuel reserves. The index is designed to achieve maximum carbon exposure reduction given a specific tracking error target. The MSCI Global Low Carbon Target Index is based on the MSCI ACWI Index, the global policy benchmark covering developed and emerging markets, and utilizes MSCI ESG CarbonMetrics data from MSCI ESG Research Inc.
BlackRock's commitment to social investing spans asset classes and enables investors to access investment strategies that target a reasonable risk-adjusted rate of return in addition to positive and measureable social or environmental outcomes. The firm managed $257 billion in social investing products as of the end of June 2014, up from $215 billion as of June 30, 2012.