By Dieter Holger
BlackRock Inc. said Wednesday that it launched in Europe three exchange-traded funds that follow environmental, social and governance criteria and hold ultrashort bonds that typically mature within one year, at it builds up its sustainability lineup and policies.
The funds, which are ESG versions of existing European ETFs, screen out companies in violation of certain environmental and social values. The screen forbids companies involved in controversial weapons, nuclear weapons, conventional weapons, civilian firearms, tobacco, adult entertainment, alcohol, gambling, nuclear power, genetically modified organisms, oil sands and thermal coal.
Each fund tracks a version of an index from IHS Markit Ltd. denominated in either dollars, euros or pounds. Both the iShares USD Ultrashort Bond ESG UCITS ETF (UEDD), iShares EUR Ultrashort Bond ESG UCITS ETF (EUED) and iShares GBP Ultrashort Bond ESG UCITS ETF (UESD) charge a total expense ratio of 0.09% or $9 for every $10,000 invested a year.
Even amid the current market uncertainty, "the trend towards sustainability is weathering the turbulence," said Brett Olson, head of fixed income iShares EMEA at BlackRock. He said sustainable ETFs have drawn $14.3 billion world-wide since the start of the year.
BlackRock, the world's largest money manager with around $7.4 trillion under management, has recently stepped up its commitment to sustainable investing.
It also released on Wednesday a tougher policy on how it will vote during shareholder meetings, which showed the company would vote against corporate directors who fail to act on climate change disclosures and executive compensation. The New York-based money manager is often among the top shareholders at corporations.
BlackRock has faced criticism for towing the line at shareholder meetings. In recent years, it has supported corporate directors around 97% of the time in recent years, according to Proxy Insight.
Write to Dieter Holger at email@example.com; @dieterholger