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BlackRock is formally incorporating an ESG policy into its flagship defined contribution strategy in the UK, the asset manager said in a news release on Wednesday.
The LifePath UK range of target-date funds launched in 1997 had £9.2 billion ($10 billion) in assets under management as of September 30. It provides access to 11 asset classes through index funds.
The addition of the ESG policy is “a continuation and evolution of LifePath UK’s ESG journey, which began in 2019, and reflects the evolution of pension regulation as well as the needs of scheme members for sustainable objectives,” BlackRock said in a news release. The changes aim to increase transparency in how LifePath UK managers address ESG risks and measure climate objectives, Blackrock said.
With the changes, the LifePath strategy now invests more than 66% of total assets in sustainable building blocks, following a transition across multiple asset classes including developed markets large-cap and small-cap equities and global ex-UK and UK corporate bonds. .
The goals of the new ESG policy include a 50% absolute reduction in carbon emission intensity through sales over a 10-year period starting July 2019, investment of at least 80% of corporate issuers’ assets in ESG strategies and at least 80%. of assets held by sovereign issuers in strategies with an ESG sovereign rating of BB or higher. The new policy also calls for additional flexibility to invest in non-index funds.
Formally adopting an ESG policy “reflects BlackRock’s commitment to listening to our customers and providing sustainable solutions that meet their expectations,” Sarah Melvin, UK head at BlackRock, said in the release.
BlackRock had a total of $7.96 trillion in AUM as of September 30.
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