BlackRock has launched the Authorised Contractual Scheme (ACS) World ESG Insights Equity Fund, which is designed to simplify ESG investing by focusing on the factors that matter and can demonstrate materiality.
The fund is underpinned by BlackRock’s proprietary ESG assessment framework which is designed to overweight companies we believe may benefit over time from a focus on capturing ESG risks and opportunities, while also aiming for a 50 per cent reduction in carbon intensity compared to the FTSE Developed Index.
The framework assesses ESG data from multiple sources for their 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 below:
Environment: Considers a company’s exposure and management of risks and opportunities associated with a transition to a lower carbon economy.
Social: Issues reflect how corporations interact with both their internal (workforce) and external (community, supply chains) stakeholders.
Governance: Focuses on good corporate governance structures and behaviours that allow companies to better manage changes in technological, social, environmental and regulatory conditions.
The fund will be managed by Jonathan Adams and Andre Bertolotti who will draw research insights from BlackRock’s Sustainable Investing team.
To ensure the strategy employs a rigorous and systematic approach defined by consideration of ESG factors, the fund will employ detailed and regular reporting, including ESG and Carbon metrics, aligned to the UN’s Sustainable Development Goals and the Paris Agreement.
Sarah Melvin, Head of UK at BlackRock, says: “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.”
Tom Fekete, Head of Sustainable Investment Solutions for EMEA and APAC, says: “Aligned with our conviction that climate risk is investment risk, sustainability is a key component of the way BlackRock constructs portfolios and designs products. 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.”
