This strategy holds securities with low exposure to ESG risk relative to those of its peers in the Morningstar US Fixed Income category, earning it the highest Morningstar Sustainability Rating of 5 globes. ESG risk provides investors with a signal that reflects to what degree their investments are exposed to risks related to material ESG issues, including climate change, biodiversity, product safety, community relations, data privacy and security, bribery and corruption, and corporate governance, that are not sufficiently managed. ESG risk differs from impact, which is about seeking positive environmental and social outcomes.
The strategy of iShares $ Development Bank Bds ETF (Acc) has a sustainable investment objective in accordance with Article 9 of SFDR. It is therefore more likely to align with the expectations of an investor who cares about sustainability issues. One key area of strength for iShares $ Development Bank Bds ETF (Acc) is its low Morningstar Portfolio Carbon Risk Score of 7.44 and very low fossil fuel exposure over the past 12 months, which earns it the Morningstar Low Carbon Designation. Thus, the companies held in the portfolio are in general alignment with the transition to a low-carbon economy.
The fund aims to avoid, or limit exposure to, companies in violation with international norms, such as the UN Global Compact or the Universal Declaration of Human Rights. The fund has little exposure (0.01%) to companies with high or severe controversies. From bribery and corruption to workplace discrimination and environmental incidents, controversies are incidents that have a negative impact on stakeholders or the environment, which create some degree of financial risk for the company. Severe and high controversies can have significant financial repercussions, ranging from legal penalties to consumer boycotts. In addition, they can damage the reputation of both companies themselves and their shareholders.
United States