BlackRock has launched a global equity ESG fund that will select companies based on a quantitative approach.
The World Environmental, Social and Governance Insights equity fund will invest in businesses identified as likely to benefit from capturing ESG risks and opportunities, while also targeting a 50% reduction in carbon intensity compared with the FTSE Developed index.
The fund is managed by Jonathan Adams and Andre Bertolotti with the support of BlackRock’s sustainable investing team.
The fund carries an ongoing charges figure of 0.03% but BlackRock said investors will also be subject to a 2% charge where the ‘manager suspects excessive trading’ but did not give out any more details to clarify this point.
BlackRock will also receive 37.5% of revenue from any securities lending undertaken by the fund, with the remainder going to the vehicle.
The strategy’s framework assesses ESG data from multiple sources for their materiality, or the relevance of a sustainability factor to a company’s financial performance.
It then aggregates this into 15 sustainable descriptors under the separate themes of environment, social and governance to produce a score for each company.
The head of BlackRock’s UK business, Sarah Melvin, said: ‘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.
BlackRock’s founder Larry Fink noted earlier this month that the firm is ‘systematically integrating climate and broader sustainability factors into [its] portfolio management process.’
Last month, the asset management giant hired Paul Bodnar to lead its US-based sustainable investing platform after the division’s former boss left the asset manager to work at the White House.
In November 2020, then president-elect Joe Biden tapped BlackRock global head of sustainable investing Brian Deese to serve as his director of the National Economic Council.