iShares MSCI ACWI Low
Carbon Target ETF
Key Takeaways
•
Seek to maintain global stock exposure while reducing the carbon footprint of an
investment portfolio
•
Support companies less dependent on fossil fuels by overweighting their stocks
relative to higher carbon-emitting peers
•
iShares MSCI ACWI
Low Carbon Target
ETF
Provides a low-cost, socially responsible investment solution
Index
MSCI ACWI Low Carbon Target
Index
Holdings
CRBN’s benchmark, the MSCI ACWI Low Carbon Target Index, aims to maintain the
investment performance of global stocks while reducing carbon emissions by
underweighting investment in high carbon footprint companies.
1,196
Inception date
A company’s carbon emissions are measured using the following criteria:
December 8, 2014
Direct/Indirect emissions generated from controlled assets (i.e. company facilities,
electricity purchased to power business needs)
AUM
$314 mm
Potential future carbon emissions from fossil fuel reserves of coal, oil, and natural
gas
The index will reweight global stocks to reduce its carbon emissions while maintaining
close correlation to global stocks. Since inception, the index has maintained high
correlation relative to the broad stock market 1 (MSCI All Country World Index) while
exhibiting a significant reduction in carbon emissions (Figures 1 and 2).
Figure 1: Current Carbon
Emissions Intenstiy2
250
Figure 2: Potential Carbon
Emissions from Reserves2
237
200
150
100
56
50
0
MSCI ACWI
MSCI ACWI
Low Carbon
Target
tCO2/mm USD
tCO2/ mm USD
FALN
0.20%
Socially responsible investing seeks a dual objective: to deliver returns while targeting a
specific societal need.
•
CRBN
Expense ratio
Socially Responsible Investing with CRBN
•
Ticker
Carbon Footprint Evaluation
Criteria
3728
4000
3000
2000
1000
257
0
MSCI ACWI
MSCI ACWI
Low Carbon
Target
By overweighting companies with lower carbon characteristics, the index
exhibits an 76% reduction in current carbon emissions intensity as well as
a 93% reduction in potential carbon emissions from reserves.
1 Source: Morningstar, as of 12/31/16; index inception is 9/24/14.
2 Source: MSCI, as of most recent index reweight in November 2016.
iShares.com/CRBN
Source: BlackRock, as of
12/31/16. Holdings subject to
change.
Direct/Indirect
Emissions
Fossil Fuel Reserves
Reducing Carbon Exposure
The MSCI ACWI Low Carbon Target Index takes into account two dimensions of the carbon footprint of its underlying stocks –
carbon emissions and fossil fuel reserves.
•
Current carbon emissions are largely attributable to the utilities, materials, and energy sectors. Future carbon emissions in
the form or fossil fuel reserves are highly concentrated in the energy and materials sectors.
•
Merely eliminating these industries from the fund might cause investment performance to suffer. Instead, CRBN seeks to
re-weight the parent index to reduce the carbon emissions and fossil fuel reserves of its underlying stocks.
•
As a result, the fund’s sector allocation is underweight these carbon-oriented industries as well as large producers within
the energy industry (see below).
Bottom 5 Relative Index Underweights
Exxon Mobil Corp
Chevron
Sector
Weight %
Energy
0.21%
Energy
0.17%
Relative Index Sector Allocation
Difference
from ACWI
Sector
Weight %
Difference
from ACWI
-0.78%
Consumer Discretionary
12.1%
-0.42%
Consumer Staples
9.7%
0.2%
Energy
6.2%
-1.2%
0.0%
BP
Energy
-
-0.31%
Financials
19.5%
0.8%
Total SA
Energy
-
-0.31%
Health Care
11.2%
0.1%
Berkshire Hathaway B
Financials
0.28%
-0.24%
Industrials
11.9%
1.2%
Information Technology
15.7%
0.2%
Materials
4.0%
-1.3%
Real Estate
3.3%
0.2%
Telecommunication Services
4.0%
0.4%
Utilities
2.6%
-0.5%
Source: MSCI, as of 12/31/16. Index constituents and allocations subject to change.
Carefully consider the Funds' investment objectives, risk factors, and charges and expenses before investing. This
and other information can be found in the Funds' prospectuses or, if available, the summary prospectuses which
may be obtained by visiting www.iShares.com or www.blackrock.com. Read the prospectus carefully before
investing.
Investing involves risk, including possible loss of principal.
International investing involves risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of
substantial volatility due to adverse political, economic or other developments. These risks often are heightened for investments in emerging/developing
markets and in concentrations of single countries.
Funds that concentrate investments in specific industries, sectors, markets or asset classes may underperform or be more volatile than other industries,
sectors, markets or asset classes than the general securities market.
The iShares MSCI ACWI Low Carbon Target ETF may not reflect a lower carbon exposure as there is no guarantee that the underlying index will achieve
its intended results or accurately assess an issuer's actual and potential carbon emissions. Buying and selling shares of ETFs will result in brokerage
commissions.
The Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”). The iShares Funds are not sponsored, endorsed,
issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the Funds. BlackRock is
not affiliated with MSCI Inc.
©2017 BlackRock. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock. All other marks are the property of their
respective owners.
iS-20200-0217