Review the MSCI methodology behind the Sustainability Characteristics and Business Involvement metrics: 1ESG Fund Ratings; 2Index Carbon Footprint Metrics; 3Business Involvement Screening Research; 4ESG Screened Index Methodology; 5ESG Controversies; 6MSCI Implied Temperature Rise
For funds with an investment objective that include the integration of ESG criteria, there may be corporate actions or other situations that may cause the fund or index to passively hold securities that may not comply with ESG criteria. Please refer to the fund’s prospectus for more information. The screening applied by the fund's index provider may include revenue thresholds set by the index provider. The information displayed on this website may not include all of the screens that apply to the relevant index or the relevant fund. These screens are described in more detail in the fund’s prospectus, other fund documents, and the relevant index methodology document.
Certain information contained herein (the “Information”) has been provided by MSCI ESG Research LLC, a RIA under the Investment Advisers Act of 1940, and may include data from its affiliates (including MSCI Inc. and its subsidiaries (“MSCI”)), or third party suppliers (each an “Information Provider”), and it may not be reproduced or redisseminated in whole or in part without prior written permission. The Information has not been submitted to, nor received approval from, the US SEC or any other regulatory body. The Information may not be used to create any derivative works, or in connection with, nor does it constitute, an offer to buy or sell, or a promotion or recommendation of, any security, financial instrument or product or trading strategy, nor should it be taken as an indication or guarantee of any future performance, analysis, forecast or prediction. Some funds may be based on or linked to MSCI indexes, and MSCI may be compensated based on the fund’s assets under management or other measures. MSCI has established an information barrier between equity index research and certain Information. None of the Information in and of itself can be used to determine which securities to buy or sell or when to buy or sell them. The Information is provided “as is” and the user of the Information assumes the entire risk of any use it may make or permit to be made of the Information. Neither MSCI ESG Research nor any Information Party makes any representations or express or implied warranties (which are expressly disclaimed), nor shall they incur liability for any errors or omissions in the Information, or for any damages related thereto. The foregoing shall not exclude or limit any liability that may not by applicable law be excluded or limited.
Index history does not represent trades that have actually been executed and therefore may under or over compensate for the impact, if any, of certain market factors, such as illiquidity. No representation is being made that an actual investment in accordance with the above will or is likely to achieve profits or losses similar to the index history. Indexes are unmanaged and do not reflect the payment of transaction costs, advisory fees or expenses that are associated with an investment in an investable product. An index’s performance is not illustrative of an investable product’s performance. Indexes are not securities in which direct investments can be made.
Important information about the iShares® Funds
iShares® ETFs are managed by BlackRock Asset Management Canada Limited. Commissions, trailing commissions, management fees and expenses all may be associated with investing in exchange-traded funds (ETFs). Please read the relevant prospectus before investing. The indicated rates of return are the historical annual compounded total returns including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. ETFs are not guaranteed, their values change frequently and past performance may not be repeated. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional.
Index returns are denominated in Canadian Dollars for all funds, except XIG and XHY. For XIG and XHY, index returns shown are denominated in U.S. Dollars. Fund returns are denominated in Canadian Dollars for all iShares ETFs. For iShares ETFs offering U.S. Dollar denominated units, index returns and fund returns for such units are denominated in U.S. Dollars.
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Index-related risks
In order to meet its investment objective, each iShares® fund will seek to achieve a return which reflects the return of its benchmark index as published by the relevant index provider. While index providers do provide descriptions of what each benchmark index is designed to achieve, index providers do not generally provide any warranty or accept any liability in relation to the quality, accuracy or completeness of data in respect of their benchmark indices, nor any guarantee that the published indices will be in line with their described benchmark index methodologies. Errors in respect of the quality, accuracy and completeness of the data may occur from time to time.
In addition, apart from scheduled rebalances, index providers may carry out additional ad hoc rebalances to their benchmark indices in order to, for example, correct an error in the selection of index constituents. Where the benchmark index of a fund is rebalanced and the fund in turn rebalances its portfolio to bring it in line with its benchmark index, any transaction costs arising from such portfolio rebalancing will be borne by the fund and, by extension, its unitholders.
Therefore, errors and additional ad hoc rebalances carried out by an index provider to a fund’s benchmark index may increase the costs of the fund.
There is no assurance that a fund’s benchmark index will continue to be calculated and published on the basis described in the fund’s prospectus or that it will not be amended significantly. The past performance of each benchmark index is not a guide to future performance.
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EIIiH0322C/S-2099483
As an expert in sustainable investing and ESG (Environmental, Social, and Governance) criteria, I have a deep understanding of the methodologies employed by index providers, particularly the MSCI (Morgan Stanley Capital International) framework. My expertise is rooted in a comprehensive knowledge of ESG fund ratings, index carbon footprint metrics, business involvement screening research, ESG-screened index methodology, ESG controversies, and MSCI implied temperature rise.
Let's break down the key concepts mentioned in the article:
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ESG Fund Ratings:
- These ratings assess the Environmental, Social, and Governance performance of a fund. MSCI, as mentioned, utilizes its ESG Research LLC to provide these ratings.
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Index Carbon Footprint Metrics:
- MSCI measures the carbon footprint of an index, reflecting the environmental impact of constituent securities. This is crucial for investors focused on climate-conscious investing.
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Business Involvement Screening Research:
- MSCI conducts research to identify and evaluate the extent of a company's involvement in various business activities. This screening helps investors make informed decisions based on a company's impact on ESG factors.
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ESG Screened Index Methodology:
- This methodology involves applying specific criteria to create an index composed of companies meeting certain ESG standards. MSCI outlines the screening process and criteria in its methodology documents.
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ESG Controversies:
- This refers to instances where companies within an index are involved in controversial activities from an ESG perspective. MSCI likely tracks and reports on these controversies to inform investors.
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MSCI Implied Temperature Rise:
- This is an innovative metric that estimates the potential temperature increase based on the current carbon emissions of companies in the index. It helps investors gauge the climate impact of their investments.
The article emphasizes the importance of understanding that funds with an ESG integration objective may still passively hold securities that do not fully comply with ESG criteria due to corporate actions or other situations. This underlines the need for investors to refer to the fund's prospectus for detailed information.
Additionally, the article mentions the screening applied by the fund's index provider, which may include revenue thresholds. Investors are encouraged to refer to the fund's prospectus, other fund documents, and the relevant index methodology document for a comprehensive understanding of these screens.
It's crucial to note that the information provided by MSCI ESG Research is subject to an information barrier, and users should assume the entire risk of any use they make of the information. The article also highlights that the past performance of benchmark indices is not indicative of future performance.
For users considering iShares ETFs managed by BlackRock, the article provides important information about associated risks, including those related to index-related errors, rebalances, and the possibility of changes to benchmark index calculations.
In summary, this comprehensive information provides investors with a detailed overview of the MSCI methodology, the associated risks, and the considerations involved in sustainable investing through iShares ETFs.
