iShares unveils two sustainable ETFs on LSE

iShares has launched two sustainable equity ETFs on the London Stock Exchange to address demand for investments meeting environmental, social and governance criteria.

The issuer claims the iShares Dow Jones Global Sustainability Screened fund and the Dow Jones Europe Sustainability Screened fund are the first London-listed ETFs to provide regional access to the sustainable sector.

The funds are physically-replicated products, investing in the stocks constituting the underlying indices.

Dow Jones selects the companies that are performing best against sustainable criteria, based on the Sustainable Asset Management's Corporate Sustainability Assessment. This framework analyses the largest companies globally based on economic, environmental and social standards, drilling down to industry-specific criteria.

Certain companies are also filtered out, including those involved in alcohol, tobacco, gambling, armaments and firearms, and adult entertainment.

Axel Lomholt, head of product development for iShares EMEA, says: "We have seen growing demand from clients for ways in which they can incorporate environmental, social and governance considerations into their investments. Sustainable responsible investing is a fast growing market, with €5 trillion in assets under management in Europe at the end of 2009, an increase of 87% on 2007*.

"Many funds in this space focus on individual sectors, such as clean energy, climate or water and operate on a pure sector-exclusion basis. Our new European and Global Sustainability Screened ETFs take a more sophisticated approach, combining positive screening and sector exclusion to provide exposure to a broad universe of stocks.

The European and Global funds have total expense ratios of 0.45% and 0.60% respectively.