This iShares ETF will track the Thomson Reuters inclusion and diversify index, established three years ago in response to demand for data from those running ESG investment mandates.
This index ranks more than 2,000 listed companies across both developed and emerging markets, across four key metrics. These include diversity, inclusion, people development and ‘news and controversies’.
The fund will include the 100 companies with the highest scores. Thomson Reuters says this index embraces “a broader spectrum of diversity dimensions”, than comparable indices in this segment, which focus more narrowly on gender.
According to a recent McKinsey report companies that promote diversity and inclusion have been shown to deliver better long-term performance.
Thomson Reuters managing director of customer proposition Debra Walton says: “We established this index three years ago in response to the growing demand for data in support of ESG investment mandates.
“It leverages our rich ESG data and our index calculation capabilities. We are delighted that BlackRock is paving the way in developing the first ETF to track the index.”
BlackRock’s head of sustainable investment Brian Deese adds: “The increasing availability of corporate sustainability data, as well as advancement in technology, has made it possible to better measure and understand metrics, such as inclusion and diversity, from an investment perspective.”
This launch comes as new DWP regulation compels pension trustees to consider ESG factors as part of their investment process. This new rules will come into force into in October 2019.
Rachel Lord, head of EMEA at BlackRock adds: “We are launching this fund at a time when a spotlight is firmly on companies to show what they are doing to improve diversity of their workforce, and as investors demand new funds to express specific preferences within their portfolios.
“It is a significant step forward in the evolution of products that harness the power of social change to deliver long-term investment outcomes.”
