BlackRock has expanded its suite of socially responsible ETFs in Europe with the launch of a pair of equity strategies, focussed on European markets, that are aligned with the Paris Agreement’s goal of limiting global warming to 1.5°C above pre-industrial levels.

BlackRock now offers four Paris-aligned ETFs targeting global developed, US, European, and eurozone equity markets.

The iShares MSCI Europe Paris-Aligned Climate UCITS ETF (EUPB NA) and iShares MSCI EMU Paris-Aligned Climate UCITS ETF (EMPA NA) have listed on Euronext Amsterdam in euros and come with expense ratios of 0.15%.

Accumulating and distributing share classes are available for both ETFs.

The funds are linked to Paris-Aligned Benchmark (PAB) indices from MSCI that are based on the index provider’s flagship benchmarks for European and eurozone equities – the MSCI Europe and MSCI EMU.

These parent indices cover approximately 85% of the total capitalization of their target market universe.

The PAB methodology first removes companies involved in controversial weapons, tobacco, and thermal coal, as well as firms deriving significant revenue from oil and gas-related activities. The remaining securities are then reweighted based on the risks and opportunities associated with the climate transition.

MSCI harnesses a diverse array of data and analytics to feed into the construction process including scope 1, 2, and 3 carbon emissions, green revenues, and the index provider’s own proprietary low carbon transition score and climate value-at-risk measures.

The indices offer an immediate 50% reduction in weighted average carbon intensity as well as a further 10% annual decarbonization going forward.

They also aim to deliver on a range of secondary objectives such as maximizing exposure to sustainable energy providers, increasing the weight of companies with clear carbon reduction targets, minimizing fossil fuel exposure, and reducing climate value-at-risk by 50%.

With these latest additions, BlackRock’s Paris-aligned ETF range now consists of four products. The other two, which debuted in April, provide exposure to US large-cap and global developed equity markets. They are the iShares S&P 500 Paris-Aligned Climate UCITS ETF (UPAB NA) and the iShares MSCI World Paris-Aligned Climate UCITS ETF (WPAB NA).

All four ETFs are categorized as Article 9 products under the European Union’s Sustainable Finance Disclosure Regulation (SFDR).

Climate-change strategies have been a favoured area of ETF product development recently with several other issuers offering funds in this category.

Lyxor was first to market in Europe with a suite of Paris-aligned equity ETFs that were introduced in June of last year. It offers global, US, and eurozone Paris-aligned equity ETFs with expense ratios of 0.20%. The suite houses just over $1bn in assets.

Fellow French issuer Amundi, which has agreed to acquire Lyxor, followed up with its own Paris-aligned suite just one week later, targeting global, European, and eurozone equity markets and landing with expense ratios between 0.18% and 0.25%.

Franklin Templeton debuted two Paris-aligned ETFs the following month which are based on US and European equity benchmarks and come with expense ratios of 0.15%.

This year, UBS unveiled a full suite of Paris-aligned equity ETFs in April that target global developed, US, European, eurozone, and Japanese equity markets. They come with expense ratios between 0.12% and 0.20%.

Most recently, HSBC entered the Paris-aligned arena in July with a global developed ETF that costs 0.18%.