ETFs TO CONSIDER
WHY IT MATTERS
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Evidence that ESG criteria and exposure to fossil fuel-related activities influence portfolio outcomes is helping to displace conventional notions that sustainable investing means sacrificing returns. ETFs may be included into portfolios for potentially better risk and return characteristics, and to help meet sustainability and climate goals.”
Armando Senra
Head of iShares Americas
THE STRATEGY
Funds with this strategy seek to exclude or reduce the presence of securities that are affiliated with fossil fuels. Some funds do this by screening out specific industries or sectors. The iShares ESG Advanced MSCI USA ETF, for instance, seeks to track an index of companies with favorable environmental, social and governance (ESG) ratings while also screening out those involved in controversial business activities, including those related to fossil fuels.
There are also more sophisticated strategies as companies start to disclose data about their environmental impacts. That’s allowed funds, like the iShares MSCI ACWI Low Carbon Target ETF, for example, to target companies with lower carbon footprints.
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Seek To Reduce Exposure To Carbon Emissions Or Fossil Fuels
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iShares ESG Advanced MSCI USA ETF
Prioritize higher-rated ESG companies while extensively screening out controversial activities, including those related to fossil fuels.
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Obtain exposure to a broad range of global stocks that are less dependent on fossil fuels.
iShares MSCI ACWI Low Carbon Target ETF
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Seek to eliminate exposure to certain controversial business activities that pose risks or do not align with an investor’s preferences.
iShares ESG Screened S&P 500 ETF
ETFs TO CONSIDER
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Access global investment-grade green bonds issued to fund projects with direct climate or environmental benefits.
iShares
Global Green Bond ETF
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Target exposure to companies that produce energy from solar, wind and other renewable sources.
iShares
Global Clean Energy ETF
WHY IT MATTERS
Increasing laws around emissions and progress toward a carbon-neutral economy as well as anticipation of further regulations is increasingly impacting how companies evolve their business to address climate change.”
Gargi Pal Chaudhuri
Head of iShares Investment Strategy
THE STRATEGY
Investors with high conviction in climate investing and a higher tolerance for risks and returns that deviate from broad benchmarks may want to consider thematic and impact investments. Thematic and impact funds provide exposure to particular climate-related themes, such as clean energy. They may also invest in green bonds, which are used to fund specific environmental projects, like water treatment plants or wind farms.
With these ETFs, investors can support companies that are delivering positive environmental impacts. The iShares Global Clean Energy ETF, for instance, focuses on global companies in the renewable energy sector that are involved in the production or the distribution of solar, wind and other forms of renewable energy.
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Target Climate Themes And Impact Outcomes
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ETFs TO CONSIDER
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Invest in large- and mid-capitalization world ex-U.S. equity securities that may be better positioned to benefit from the transition to a low-carbon economy.
BlackRock World
ex U.S. Carbon Transition Readiness ETF (Active)
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Invest in large- and mid-capitalization U.S. equity securities that may be better positioned to benefit from the transition to a low-carbon economy.
BlackRock U.S. Carbon Transition Readiness ETF (Active)
WHY IT MATTERS
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We believe that investors who don’t consider the effects of climate change on the global economy and asset prices aren’t seeing the whole picture. Emerging research suggests that companies that are most well adapted to a low-carbon economy are better positioned than peers to grow earnings, and that greenhouse gas efficiency has links to financial performance.”
Armando Senra
Head of iShares Americas
THE STRATEGY
The transition to a low-carbon economy has started, and we believe companies that adjust to that reality can benefit. Funds can invest in companies based on exposure to, and management of, transition risks and opportunities. The BlackRock U.S. Carbon Transition Readiness ETF, for instance, focuses on companies that BlackRock believes are better positioned to benefit from the transition to a low-carbon economy. This ETF considers a company’s energy management, water management and waste management, among other things.
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Prioritize Companies That May Benefit From The Transition To A Low-Carbon Economy
Learn How To Pursue This Goal
To learn more about how you can integrate climate risks and opportunities into your portfolio using ETFs, click here.
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