Investment giant BlackRock announced today the launch of the BGF Climate Action Multi-Asset Fund and the BGF Climate Action Equity Fund, aiming to provide investors with access to major climate themes that are expected to enable or benefit from the transition to a lower greenhouse gas (GHG) emissions economy and to net zero carbon emissions.
The new funds, which will form part of BlackRock’s active sustainable range in EMEA, will integrate ESG criteria into their investment process, and both are classified as Article 9 under EU SFDR.
Both of the new funds will target investments on companies and issuers that are driving reductions in GHG emissions across all market segments, and on those providing solutions for climate change mitigation and adaptation, as well as investing in issuers that are in the process of making their own business models more resilient to climate and resource depletion risks.
The BGF Climate Action Multi-Asset Fund will invest in a broad range of asset types, including equities, equity-related securities, fixed income securities, funds, cash, deposits and money market instruments. The fund aims incorporate a year-on-year decarbonisation rate, and expects to deliver a lower carbon intensity score than its benchmark, which is made up of the MSCI All Country World Index (65%) and Bloomberg Barclays Global Aggregate Bond Index (35%).
Rupert Harrison, Portfolio Manager for Multi-Asset Strategies at BlackRock, said:
“Investors are increasingly looking to align their climate priorities with their investment goals – a balance that can prove highly complex and potentially create challenges on many levels. In aiming to address this, a multi-asset approach can tap into a wide array of climate-related strategies to seek out the most attractive investment opportunities – and manage the risks – presented by climate change. By doing so, it aims to provide a smoother investment journey through diversification and careful risk management.”
Working from an investment universe of around 1,000 securities, BGF Climate Action Equity will invest in a relatively concentrated portfolio of equities across a broad market cap range, targeting climate action themes including clean power, resource efficiency, sustainable nutrition, biodiversity and clean transport. BlackRock stated that the fund will focus on uncovering the long-term, disruptive structural winners driving the reduction of greenhouse gas emissions across the market cap spectrum.
Tom Holl, Portfolio Manager, Fundamental Equities at BlackRock, said:
“The Fund targets greenhouse gas emissions at source by investing globally in the sectors that are mitigating the most significant causes of CO2 emissions – such as power generation, transportation fuels, agriculture and industrial processes and waste. As the move towards a greener future picks-up pace, we are seeing many companies capable of enabling, as well as benefiting from, the transition to a lower greenhouse gas emissions economy. The strategy’s investment approach harnesses BlackRock’s extensive Thematics expertise with the aim of meeting the returns expectations of sustainability-minded investors.”