Investment management giant BlackRock and SGX Group (Singapore Exchange) announced today the launch of the iShares MSCI Asia ex-Japan Climate Action ETF, aimed at enabling investors to incorporate low carbon transition objectives in their portfolios and invest in best-in-class companies committed to reducing carbon emissions.

The new fund, managed by BlackRock and anchored by asset owner Prudential, launches with assets under management (AUM) of $426 million, making it the largest-ever equity ETF launched in Singapore.

Peter Loehnert, APAC Head of iShares and Index Investments, BlackRock, said:

“Asia Pacific is the largest and fastest growing region for energy transition investment, offering transformational opportunities for investors with climate-focused objectives. Investors globally are increasingly choosing iShares ETFs as ideal vehicles to align portfolio allocations and implement low-carbon transition goals. This new fund will provide them with an innovative, unique and powerful building block to access companies in the region leading the transition.”

The new ETF tracks the MSCI AC Asia ex Japan Climate Action Index, which forms part of the recently-launched MSCI Climate Action Indexes. MSCI introduced its Climate Action Index suite last year, aimed at enabling investors to invest in companies making progress towards emissions reduction targets. The indexes consist of companies taking measurable steps to reduce emissions, and provides exposure to all economic sectors, by selecting the top 50% of companies in each GICS sector based on factors including Scope 1, 2 and 3 emissions intensity, approved science-based targets, management of climate risks, and green business revenue.

Michael Syn, Senior Managing Director and Head of Equities, SGX Group, said:

“SGX Group plays a vital role in galvanising stakeholders within the financial ecosystem to mobilise capital and develop solutions to effect real change in addressing climate change. With the market and investors signalling their readiness for it, we have been working in partnership with BlackRock and MSCI to create a new global ecosystem of climate-related instruments such as this ETF and the climate action derivatives that were launched earlier this year.”

The launch of the new ETF comes as Singapore endeavors to establish itself as a hub for sustainable finance in Asia, and to attract capital from investors looking to align their investments with climate considerations. In 2019, Singapore’s central banks and financial regulator, the Monetary Authority of Singapore (MAS), launched a Green Finance Action Plan (GFAP) aimed at mobilizing capital to facilitate Asia’s low carbon transition, updated earlier this year with its more comprehensive  Finance for Net Zero (FiNZ) Action Plan.

Gillian Tan, Assistant Managing Director and Chief Sustainability Officer for MAS, said:

“The successful launch of the iShares MSCI Asia ex-Japan Climate Action ETF is the outcome of close collaboration between SGX Group, MSCI and BlackRock, and adds to the suite of innovative products in Singapore that supports transition and decarbonisation efforts in Asia. Looking ahead, Singapore welcomes the development of solutions that facilitate decarbonisation, while meeting the investment and risk management needs of issuers, asset owners and investors in the region.”