Industry Updates

BlackRock lists new socially responsible ETF in London

David Tuckwell

BlackRock has been among the most vocal advocates of environmental and social governance in finance.

And now it's listing a new ETF in London with an eye to ESG around the world.

The iShares MSCI World SRI UCITS ETF (SUSW), will track an MSCI index of worldwide large-cap companies judged by MSCI to be more socially responsible.

The index does this by outrightly excluding companies in certain industries, such as weapons and firearms, tobacco, alcohol, nuclear power, gambling, porn and genetically modified organisms. And then rating those which remain by how environmentally conscious they are.

Fossil fuel companies are included in the index. French oil major Total is one of the top five index constituents.

"We consistently hear from our clients that they are looking more closely at improving the ESG and carbon profile of their investments, which they acknowledge helps manage risk in their portfolios," said Manuela Sperandeo, Head of Specialist Sales at iShares.

"This ETF is the latest addition to a range that allows investors to express their active investment decisions on a broad range of markets and geographies, quickly and cost-effectively."

iShares has listed several SRI ETFs around the world over the last ten years. These include the US-listed iShares MSCI ACWI Low Carbon Target ETF (CRBN) and iShares MSCI KLD 400 Social ETF (DSI). DSI, which was one of the first SRI ETFs, accounts for around $1bn of the $4.7bn BlackRock manages in its ESG ETFs.

ESG ETFs are becoming increasingly common as millennials get richer and press their demands for greener investment options on money managers. ESG funds have also received backing from activist groups, which demand companies to divest from fossil fuels.

While ESG screens are growing in popularity, they are notoriously difficult to measure. For example, the website, which provides an ESG filter for its data, provides four different filters for assessing ESG compliance.

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