BlackRock is formally incorporating an ESG policy into its flagship defined contribution strategy in the U.K., the asset manager said in a news release Wednesday.
The LifePath U.K. series of target-date funds launched in 1997 had £9.2 billion ($10 billion) in assets under management as of Sept. 30. It provides access to 11 asset classes through index funds.
Adding the ESG policy "is a continuation and evolution of LifePath U.K.'s ESG journey, which began in 2019, and reflects scheme members' requirements for sustainable objectives alongside evolving pension regulation," BlackRock said in the news release. The changes are aimed at enhancing transparency into how LifePath U.K. managers address ESG risks and measure climate objectives, BlackRock said.
With the changes, the LifePath strategy now has more than 66% of total assets invested in sustainable building blocks, following the transition of several asset classes, including developed markets large-cap and small-cap equities and global ex-U.K. and U.K. corporate bonds.
The goals of the new ESG policy include an absolute reduction of 50% in carbon emissions intensity by sales over a 10-year period starting from July 2019, investing at least 80% of assets held in corporate issuers in ESG strategies and at least 80% of assets held in sovereign issuers in strategies with an ESG sovereign rating of BB or higher. The new policy also calls for additional flexibility to invest in non-index funds.
Formally adopting the ESG policy "reflects BlackRock's commitment to listening to our clients and providing sustainable solutions that meet their expectations," said Sarah Melvin, head of U.K. at BlackRock, in the release.
BlackRock had a total of $7.96 trillion in AUM as of Sept. 30.