BlackRock, a large investment firm, has introduced the BlackRock Global Funds [BGF] Brown to Green Materials Fund, a new fund that focuses on investment opportunities in the materials sector related to the transition towards a low-carbon economy.
BlackRock states that the launch of this fund is motivated by the fact that most investments in the low-carbon transition have been concentrated in areas like renewable energy and electric vehicles. They believe that the market may have overlooked the crucial materials required for this transition. As a result, there are significant investment opportunities in companies supplying key materials and in carbon-intensive industries such as metals, mining, cement, and construction, as these companies adopt credible transition plans and reduce sustainability risks.
The fund will have a concentrated portfolio consisting of 30-60 global companies across different market capitalizations. The portfolio will include companies categorized as “Emissions reducers,” which have plans to reduce emissions intensity or allocate more than 30% of capital expenditure to carbon reduction strategies. “Enablers” will encompass companies that generate a significant portion of their revenue from lower carbon markets or provide solutions that help materials companies reduce their emissions. “Green leaders” will include materials companies ranking in the top quartile for the MSCI Carbon Emissions Score in their respective industries.
Managed by Evy Hambro, Olivia Markham, and Hannah Johnson from BlackRock’s Thematics and Sectors team, the fund will be classified as Article 8 under SFDR (Sustainable Finance Disclosure Regulation).
