iSHARES SRI ETFs

With the iShares SRI (socially responsible investing) equity range, investors can gain exposure to the companies with the strongest commitments to Environmental, Social and Governance (ESG) business practices compared to their industry peers. The suite of SRI ETFs is designed to give clients the most sustainable approach to gaining broad market exposure.

 


Capital at risk. This information should not be relied upon as investment advice, or a recommendation regarding any products, strategies. The environmental, social and governance (“ESG”) considerations discussed herein may affect an investment team’s decision to invest in certain companies or industries from time to time. Results may differ from portfolios that do not apply similar ESG considerations to their investment process.

AN SRI APPROACH TO SUSTAINABILITY

Icon

Top-rated ESG companies

Invest in the companies with the strongest commitments to sustainable business practices.

Icon

Values based screens

Our widest set of screens for controversial business activities.

Icon

Carbon intensity reduction

Lower your portfolio’s carbon footprint with enhanced fossil fuel screens.

Moving from traditional indices
to SRI

Click the circles to view more.

Parent Index

SRI Select Reduced Fossil Fuels (RFF) Index

X

Screens

Alcohol, Adult Entertainment, Civilian Firearms, Controversial Weapons, Conventional Weapons, Gambling, Genetically Modified Organisms, Nuclear Weapons, Nuclear Power, Thermal Coal, Oil Sands*, Unconventional Oil & Gas*, Conventional Oil & Gas*, Oil & Gas-based Power Generation*, Thermal Coal Reserves*, Oil Sands Reserves*



* The new environmental screens added versus the MSCI SRI index. Indices are unmanaged and one cannot invest directly in an index. This material is provided for informational purposes only and is not intended to be investment advice or a recommendation to take any particular investment action.



Sources: MSCI, BlackRock as at 31 October 2019.

X

ESG rating eligibility

New entrants required to have an MSCI ESG rating of A or above (AAA best, CCC worst)



Sources: MSCI, BlackRock as at 31 October 2019.

X

Controversy score eligibility

New entrants required to have an MSCI controversy score of 4 or above (0 worst, 10 best)



Sources: MSCI, BlackRock as at 31 October 2019.

X

Best-in-class selection

Remaining securities ranked by ESG Rating within their GICS sector and added to the SRI RFF index until a target coverage of 25% of the underlying parent index is reached



Sources: MSCI, BlackRock as at 31 October 2019.

*The ESG Best-in-class approach prioritises higher-rated ESG companies while extensively screening out controversial industries.

Rules behind the SRI RFF screens

Screening metrics can help investors gain a more comprehensive view of specific activities to which a fund may be exposed through the investments it holds. Click to learn more about the business involvement screens in the iShares SRI range.

    • 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 that manufacture nuclear warheads, nuclear missile systems, exclusive and dual use components, exclusive and dual use delivery platforms and provide auxiliary services related to nuclear weapons.
    • Tobacco: all 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.
    • Civilian firearms: all 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.
    • Conventional weapons: all companies deriving 5% or more revenue from the production of conventional weapons or 10% or more aggregate revenue from weapons systems, components, and support systems and services.
    • Alcohol: all companies deriving 5% or more revenue from the production of alcohol-related products or 15% or more aggregate revenue from the production, distribution, retail and supply of alcohol-related products.
    • Adult entertainment: all companies deriving 5% or more revenue from the production of adult entertainment materials or 15% or more aggregate revenue from the production, distribution and retail of adult entertainment materials.
    • Gambling: all companies deriving 5% or more revenue from ownership of operation of gambling related business activities or 15% or more aggregate revenue from gambling related business activities.
    • Nuclear power: all companies generating 5% or more of their total electricity from nuclear power in a given year or have 5% or more of installed capacity attributed to nuclear sources in a given fiscal year or deriving 15% or more aggregate revenue from nuclear power activities.
    • Genetically modified organisms: all companies deriving 5% or more revenue from activities like genetically modifying plants, such as seeds and crops, and other organisms intended for agricultural use or human consumption.

    Sources: MSCI as at 31 October 2019.

    • Thermal coal: all companies deriving 5% or more revenue from the mining of thermal coal and its sale to external parties, and those deriving 5% or more revenue from thermal coal based power generation or generating 10% or more of their total electricity* from thermal coal in a given year.
    • Oil sands*: all 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.
    • Unconventional oil & gas*: all companies deriving 5% or more revenue from unconventional oil and gas production such as oil shale, shale gas, shale oil, coal seam gas, coal bed methane, onshore or offshore oil and gas production in the Arctic region.
    • Conventional oil & gas*: all companies deriving more than 0% of revenue from conventional oil and gas production and less than 40% revenue from products, services, or infrastructure projects supporting the development or delivery of renewable energy and alternative fuels.
    • Oil & gas-based power generation*: all companies generating 30% or more of their total electricity from liquid fuel and natural gas in a given year.
    • Thermal coal reserves*: all companies that provide evidence of owning thermal coal reserves and are deriving more than 0% revenue from the mining of thermal coal.
    • Oil sands reserves*: all companies that provide evidence of owning oil sands reserves and are deriving more than 0% revenue from oil sands extraction.

    Sources: MSCI as at 31 October 2019.

    To find out more on screening click here.

Building the SRI index

SRI RFF indexes are constructed by applying a combination of values and climate change-based exclusions alongside a Best-in- Class selection process. The graphs below show the ESG score improvements and carbon intensity reductions of SRI RFF indexes vs parent benchmarks. Scroll to the right to see both.

ESG score improvements of SRI RFF vs parent benchmarks

ESG score improvements of SRI RFF vs parent benchmarks Carbon intensity reductions of SRI RFF vs parent benchmarks

Sources: BlackRock, as at 31 October 2019.

ESG score is the weighted average of the underlying holdings’ ESG scores.

Explore the iShares SRI ETFs

 

Equity Ticker Name Total expense ratio
Global SUSW iShares MSCI World SRI UCITS ETF > 20 bps
Emerging Markets SUSM iShares MSCI EM SRI UCITS ETF > 25 bps
Europe IESG iShares MSCI Europe SRI UCITS ETF > 20 bps
EMU SMUA iShares MSCI EMU SRI UCITS ETF > 20 bps
Japanese SUJP iShares MSCI Japan SRI UCITS ETF > 20 bps
SUJS iShares MSCI Japan SRI EUR Hedged UCITS ETF > 25 bps
US SUAS iShares MSCI USA SRI UCITS ETF > 20 bps
3SUR iShares MSCI USA SRI UCITS ETF EUR Hedged > 23 bps

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. 

SUSTAINABLE MYTHBUSTING

Getting the facts straight on sustainable index investing.