• Driving Decarbonisation: The fund targets high-emitting industries like metals, mining, and cement with the potential for transformative environmental impact.
• Sustainability Commitment: At least 70% of the fund’s assets align with BlackRock’s sustainability objectives under the UK Sustainable Fund Disclosure Regime.
• Performance Benchmark: Builds on the success of the European Brown to Green Materials Fund, which achieved an average emissions intensity reduction of 6.4% in one year.

BlackRock has launched the BFM Brown to Green Materials Fund, a UK-domiciled mutual fund designed to accelerate the decarbonisation of industries critical to the low-carbon transition. This includes sectors like metals, mining, cement, chemicals, steel, and construction materials.

Strategic Focus

The fund uniquely targets “overlooked sectors” that are often seen as major emitters but have significant potential for environmental improvement. It invests in companies with credible plans to decarbonise their operations, aiming to enhance their sustainability and long-term valuation.

“Companies which are high emitters today but have credible plans to decarbonise could offer significant investment opportunities,” said Evy Hambro, Global Head of Thematic and Sector Investing at BlackRock.

Sustainability Improvers

The BFM Brown to Green Materials Fund is the first UK mutual fund to receive the “Sustainability Improvers” label under the UK’s Sustainable Fund Disclosure Regime (SDR). To qualify, the fund invests in assets with evidence-based potential for sustainability improvement.

Key Criteria:

• At least 70% of assets are aligned with sustainability objectives.
• Investments are assessed through BlackRock’s SDR Improver framework, ensuring measurable progress in emissions reduction and sustainability performance.

Related Article: 99% of Insurers Set Low-Carbon Transition Goals Across Investment Portfolios: BlackRock Survey

Building on European Success

The new UK fund builds on the performance of BlackRock’s European BGF Brown to Green Materials Fund, launched in June 2023. This European fund has:

• Grown to $78 million in assets.
• Achieved 88% portfolio progress on decarbonisation goals.
• Recorded an average emissions intensity reduction of 6.4% from 2022 to 2023.

“We expect global adoption of lower-carbon technologies to drive faster-than-expected demand growth for essential materials, boosting prices and earnings for producers,” said Olivia Markham, Managing Director and Portfolio Manager at BlackRock.

Long-Term Vision

The fund is managed by Evy Hambro, Olivia Markham, and Hannah Johnson, leveraging their expertise in thematic and sector-focused investments. With an ongoing charges fee of 0.92% for the D share class, the fund supports industries navigating the “brown to green” transition, aligning financial returns with measurable sustainability outcomes.

“What drives share prices now, and makes a positive difference to the world, is what happens moving forward rather than what’s already happened,” Hambro added.

This initiative underscores BlackRock’s commitment to investing in the low-carbon materials market, empowering companies to lead the decarbonisation of critical supply chains.

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