Asset manager BlackRock has cut the term ‘ESG’ from 56 strategies comprising its iShares MSCI ESG Screened UCITS ETF range and BSF Systematic ESG World Equity Fund. Cumulatively these funds represent US$51 billion in AUM. The change has been made in response to the European Securities and Markets Authority’s (ESMA) fund naming guidelines, which come into effect on 21 May for existing funds. The rules are an attempt to limit greenwashing in Europe by ensuring the names of funds claiming positive sustainability-related outcomes accurately reflect their investment strategies, partly by imposing minimum thresholds on funds with specific sustainability-related terms in their titles. The guidelines have applied to new funds since last November. More than 1,000 EU-domiciled green funds are expected to change names over the next couple of months ahead of the May deadline. The ESMA guidelines are expected to serve as a stopgap measure ahead of a more expansive and far-reaching update to the Sustainable Finance Disclosure Regulation expected in Q4. In January, Autorité des Marchés Financiers, the French securities commission, updated its policy on fund names to align with ESMA’s guidelines. Sixty of BlackRock’s ‘dark green’ strategies, accounting for US$92 billion in AUM, will also start implementing Paris Aligned Benchmark exclusions.
