ESG screened ETFs

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. You may not get back the amount originally invested.

The right screens can make
a big difference

  • Environmental, social and governance (ESG) screens are a type of sustainable investment. They eliminate certain exposures from your portfolio based on criteria such as business involvement or sector.
  • The iShares range of ESG screened ETFs aims to make sustainable investing as simple as traditional investing.
  • With a minimal tracking error to traditional benchmarks, ESG screened ETFs could offer a good substitutes in model portfolios (MSCI, 2012-2018).
  • No price premium on sustainability: iShares MSCI ESG Screened ETFs are offered at the same price as traditional equivalent exposures.

Why take a screened approach?

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Low Cost

iShares ESG Screened ETFs are offered at the same price as traditional core building blocks.

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Minimal tracking error

Closeness to parent index allows it to be suitable for standard benchmarks.1

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Avoid controversies

Mainstream screens and carbon intensity reduction.2

1 MSCI, 31.05.2012 to 31.07.2019. Tracking error across exposures are between 49-61bps, apart from Europe which is at 86bps.
2 25% average carbon reduction across the six listed exposures as at 31.07.2019. MSCI ESG Fund Metrics. Weighted Average Carbon Emissions Intensity measured by metric tons of carbon emissions emitted per million dollars of revenue.

What are the rules behind
the ESG screening?

iShares MSCI ESG Screened ETFs aim to track indices which exclude companies meeting any of the following descriptions:

  • Controversial Weapons: all companies with any ties to controversial weapons which includes: cluster munitions, landmines, depleted uranium weapons, biological/chemical weapons, blinding lasers, non-detectable fragments and incendiary weapons.
  • Nuclear Weapons: all companies involved in the manufacture of nuclear warheads, nuclear missile systems, exclusive and dual use components, exclusive and dual use components, exclusive and dual use delivery platforms and provide auxiliary services related to nuclear weapons.
  • UN Global Compact Violators: all companies violating the United Nations Global Compact principles.
  • Thermal Coal: exclude all companies deriving 5% or more revenue from the mining of thermal coal and its sale to external parties, and those delivering 5% or more revenue from thermal coal based power generation.
  • Civilian Firearms: companies classified as a “Producer” of firearms and small arms ammunitions for civilian markets and all others deriving 5% or more revenue from the distribution (wholesale or retail) of firearms or small arms ammunition intended for civilian use.
  • Tobacco: companies classified as a “Producer” and all others deriving 5% or more aggregate revenue from the production, distribution, retail and supply of tobacco-related products.
  • Oil sands: companies deriving 5% or more revenue from oil sands extraction, which own oil sands reserves and disclose evidence of deriving revenue from oil sands extraction.

Can you lower a portfolio's
carbon intensity?

Carbon emissions reduction of ESG Screened indices
compared to standard benchmarks.

Europe
12%

EMU
16%

EM IMI
29%

Japan
29%

World
37%

US
42%

Source: MSCI ESG Fund Metrics. Weighted Average Carbon Emissions Intensity (sales) measured by metric tons of carbon emissions emitted per million dollars of revenue (31.12.18).
For illustrative purposes only.

Time to get started

iShares MSCI ESG Screened ETFs

The iShares MSCI ESG Screened ETFs provide investors a simple, accessible, low-cost way to start building a sustainable core. The range spans six broad equity markets and is offered at the same price as traditional equivalent exposures, whilst screening out seven provocative sectors.

This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any financial instrument or product or to adopt any investment strategy.