How Qontigo and BlackRock collaborated
Release date: 23 Jun 2021
Since May, there is a "green brother" of the DAX: the DAX ESG Target Index. The objective of the new index is to reflect the DAX while maximizing its ESG score and reducing its carbon intensity by at least 30%. Qontigo has licensed this index to BlackRock for the launch of a new German-domiciled iShares ETF.
In January 2020, BlackRock announced it was placing sustainability at the heart of the firm’s investment approach. With the world moving to net-zero emissions, the world’s largest asset manager has said it believes it can best serve clients by helping them be at the forefront of that transition. This is why BlackRock is taking a number of key steps, including working on new products, collaborating in the design of sustainability indices and making sure investors can be aligned with new regulation.
We sat down with Manuela Sperandeo, Managing Director, BlackRock’s Head of Sustainable Indexing for EMEA, to find out more about her company’s commitment to sustainable investing and how working with Qontigo can help in that journey.
Manuela, BlackRock has been very clear about its commitment to sustainable investing, equaling sustainability and climate risks to investment risk. How is this commitment changing your product offering and the day-to-day management of assets?
“In 2020 we announced sustainability as our new standard for investing. We intend to make sustainable funds the standard building blocks in investment solutions wherever possible. We want to make sustainable investing more accessible to all investors and lower the hurdles for those who want to act as part of the transition to a net-zero economy. To do so, we intend to continue to expand our offerings of ESG ETFs over the next few years, including sustainable versions of flagship index products, so that clients have more choice to meet their responsible investing goals.”
What kind of role do index providers play in this transition?
“Indices act as benchmarks for the majority of global investments. Through advancements in technology, we have been able to bring ETFs based on indices to the market at a rapid pace. To offer more sustainable investment options to our clients – and all investors – we are engaging with major index providers to develop sustainable versions of their flagship indices. With Qontigo, we started to include sustainability criteria in the STOXX Thematic Indices that underlie the iShares EMEA Thematic ETFs. In June last year, we included ESG screens and controversy scores in all of our licensed thematic indices, including those tracking popular topics such as Breakthrough Healthcare, Automation & Robotics and Smart City Infrastructure.”
Why is the Sustainable Finance Disclosure Regulation (SFDR) important?
“Momentum for investing sustainably is now building, and SFDR obligations that came into force this year will be a key catalyst to accelerate this trend in Europe. SFDR aims to harmonize standards and increase transparency for all investors, helping them to clearly understand the integration of sustainability risks, the consideration of adverse sustainability impacts and the sustainability objectives of their investments.
“Articles 8 and 9 of SFDR will also change index design, in that their methodologies need to enhance E or S characteristics or objectives, and ensure that all constituents demonstrate good governance.”
What’s on your agenda for 2021?
“We are taking specific action to remove the challenges that clients face in the climate transition, partnering with them to manage the costs and risks of implementing ESG strategies and building solutions such as customized screens, labels and alignment with the UN Sustainable Development Goals (SDGs).
“We are accelerating our work with index providers like Qontigo, continuing to push for an increased number of sustainable indices and for consistency across SFDR articles 8 and 9 products.
“We take great pride, as Qontigo does, in our role in paving the path forward towards a sustainable investing world.”
