iShares MSCI ACWI Low Carbon Target ETF (CRBN US) – Portfolio Construction Methodology

The underlying MSCI ACWI Low Carbon Target Index delivers a global large-/mid-cap equity portfolio optimized to minimize carbon exposure—combining current emissions (Scopes 1, 2, and modeled 3) and potential emissions from fossil-fuel reserves—while controlling active risk. Starting from the MSCI ACWI parent, it excludes firms with controversial weapons ties, very severe ESG controversies (ESG Controversy Score 0), thermal coal mining revenue ≥1%, and oil sands revenue ≥5%. An optimizer then minimizes the index-level carbon metric subject to an ex-ante tracking-error constraint of 50 bps, country weights within ±2% of parent (a separate ±2% cap for China A Stock Connect), sector deviations generally within ±2% except no explicit cap for Energy, a single-name cap of 20× its parent weight, and one-way turnover capped at 10% per review. Reviews occur semiannually in May and November, with float-adjusted market-cap-based weights output by the optimization.

To explore CRBN in more depth, visit our ETF analytics platform for institutional-grade insights — including performance and risk metrics, correlations, sensitivities, and factor exposure: https://www.etfstrategy.com/etf/CRBN_US