iSHARES and S&P Dow Jones Indices (S&P DJI) announced April 22 a licensing agreement to deliver innovative sustainable investing options based on S&P flagship US equity indexes.
iShares will be the exclusive licensor of the indices for use with its exchanged-traded funds (ETFs) in the United States, subject to obtaining customary approvals.
This agreement brings together two global brands in indexing and asset management to advance environmental, social and governance (ESG) investment opportunities.
These ESG indices are designed to screen out companies that are in ongoing noncompliance with the United Nations Global Compact, fossil fuel extractors and other controversial companies while still seeking to maintain risk and return profiles similar to the flagship S&P equity benchmarks.
In January, BlackRock committed to working with index providers to create ESG versions of flagship indices to increase the accessibility and availability of sustainable investing solutions.
During 2020, iShares has expanded its line-up to 105 sustainable ETFs and index mutual funds globally, with 16 new offerings this year and the goal of having 150 funds globally available to clients.
Last year marked an inflection point for adoption of sustainable index funds globally with flows into these funds tripling in 2019 to US$55 billion, a record, bringing assets in index tracking sustainable mutual funds and ETFs to US$220 billion.
Over the next decade, iShares is forecasting assets invested in ETFs and index mutual funds to grow by US$1 trillion to US$1.2 trillion.