ESG Club


INVESTORS’ TOP SUSTAINABLE INVESTING CHALLENGES


Investors in Europe, the Middle East and Africa (EMEA) are increasingly turning to index investing to help them incorporate sustainable considerations in their portfolio.¹


EMEA assets in sustainable indexed products (ETFs and index funds) have more than quadrupled since 2016


For illustrative purposes only. Source: BlackRock, GBI, as of January 2023 2016


600 500 400 300 200 100 0


2022


Here are the top challenges for European investors who incorporate sustainability considerations into their portfolios.


1. Evolving your portfolio Tailoring a portfolio to improve specific sustainability characteristics can be time consuming, and the implications of incorporating both the financial perfor- mance and desired sustainability profile for the portfolio may be unclear. Our approach: iShares offers transparency for investors across all our sustainable ETFs. Investors can: ▪ Evaluate a fund based on various sus- tainability as well as financial characteris- tics on iShares ETF product pages. ▪ Build a portfolio using iShares’ range of sustainable ETFs, with the opportunity to replicate a non-sustainable benchmark or fund.


▪ Our global in-house risk management platform encompasses over 10,000+ ESG metrics from a range of third-party data providers, so that investors can access aggregated ESG data for each of our iShares sustainable fund ranges, and compare our ETFs to make informed and transparent decision-making.² Risk warning:


While proprietary


technology platforms may help manage risk, risk cannot be eliminated.


3. Choosing the right product To help meet investor demand, sustaina- ble funds have been launched in Europe in the past year with various methodolo- gies.³ With so many sustainable products to choose from, investors need clarity to navigate the options. Our approach: To help investors choose an ETF that aligns with their investment and sustainable goals, our iShares sustainable ETFs are grouped according to four


535 AUM ($bn) 112


Risk: The environmental, social and gov- ernance (“ESG”) considerations discussed herein may affect an investment team’s decision to invest in certain companies or industries from time to time. Results may differ from portfolios that do not apply similar ESG considerations to their investment process.


2. Making sense of the data Investors must be able to access and interpret ESG data so they can assess the measurable sustainability characteristics of their investments. Our approach: At iShares, we believe standardisation of ESG data across the ETF industry will bring consistency and transparency to all investors.


PI Partnership – BlackRock


Screened Uplift Thematic Impact


Funds that constrain investments by avoiding issu- ers or business activities with certain environmen- tal, social and / or governance characteristics.


Funds that commit to investments with improved en- vironmental, social and / or governance characteristics versus a stated universe or benchmark.


Funds that target investments in issuers whose business models may not only benefit from but also may drive long-term sustainability outcomes.


Funds that commit to generate positive, measurable and additional sustainability outcomes.


As at December 2022.


approaches in BlackRock’s Sustainable Investing Platform:⁴ Spotlight: fostering innovation in sustain- able fixed income indices


iShares work closely with index providers to offer ETFs that follow rules-based methodologies providing consistency across asset classes, while focusing on innovation.


One way iShares continues to innovate ETF methodologies is by introducing our first Paris-Aligned Benchmark (PAB) cor- porate bond strategy. The PAB require- ments set by the EU help investors who seek to align with a decarbonisation path- way compatible with the objectives of the Paris Agreement.


This iShares PAB methodology is designed to align to the requirements of a Paris-Aligned Benchmark index, while remaining as close as possible to the cor- responding non-sustainable index perfor- mance. This means that the risk profile can closely resemble that of traditional corporate bonds.


Sources: 1. ETF data from BlackRock, GBI, as of 31 Jan 2023, 2. BlackRock, as at 30 June 2021, EMEA Client Sustainability Survey, 3. Sustainable UCIS ETFs represented 58% of total flows in 2022 – BlackRock, as at 31 December 2022, 4. BlackRock, as at 31 Dec 2022


To learn more about investing in sustain- able ETFs, search ‘iShares sustainable’.


This document is marketing material: Before investing please read the Prospectus and the PRIIPs KID available on www.blackrock.com/it, which contain a summary of investors’ rights. Changes in the rates of exchange between currencies may cause the value of investments to diminish or increase. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Levels and basis of taxation may change from time to time. Issued by BlackRock Advisors (UK) Limited, which is authorised and regulated by the Financial Conduct Authority. Registered office: 12 Throgmorton Avenue, London, EC2N 2DL, Tel: +44 (0)20 7743 3000. Registered in England and Wales No. 00796793. For your protection, calls are usually recorded. Please refer to the Financial Conduct Authority website for a list of authorised activities conducted by BlackRock. Issued by BlackRock (Netherlands) B.V. is authorised and regulated by the Netherlands Authority for the Financial Markets. Registered office Amstelplein 1, 1096 HA, Amsterdam, Tel: 020 – 549 5200, Tel: 31-20-549-5200. Trade Register No. 17068311 For your protection telephone calls are usually recorded. For information on investor rights and how to raise complaints please go to https://www.blackrock.com/corporate/compliance/investor-right available in Italian. For investors in Israel: BlackRock Investment Management (UK) Limited is not licensed under Israel’s Regulation of Investment Advice, Investment Marketing and Portfolio Management Law, 5755-1995 (the “Advice Law”), nor does it carry insurance thereunder. For investors in South Africa: Please be advised that BlackRock Investment Management (UK) Limited is an authorised Financial Services provider with the South African Financial Services Conduct Authority, FSP No. 43288. For investors in Switzerland: This document is marketing material. © 2023 BlackRock, Inc. All Rights Reserved.


Issue 125 | July-August 2023 | portfolio institutional | 29


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52