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iShares US Insurance ETF IAK Sustainability

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Sustainability Analysis

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Sustainability Summary

iShares US Insurance ETF has several promising attributes that may appeal to sustainability-focused investors.

iShares US Insurance ETF's holdings are exposed to average levels of ESG risk relative to those of its peers in the Financials Sector Equity category, thus earning it an average Morningstar Sustainability Rating of 3 globes. Competing funds in the category with ratings of 4 or 5 globes have less ESG risk in their holdings. Unlike impact, which measures positive environmental and societal outcomes attributable to an investment, ESG risk reflects the degree to which investments could be affected by material ESG issues, including climate change, biodiversity, product safety, community relations, data privacy and security, bribery and corruption, and corporate governance.

One key area of strength for iShares US Insurance ETF is its low Morningstar Portfolio Carbon Risk Score of 6.94 and very low fossil fuel exposure over the past 12 months, which earns it the Morningstar Low Carbon Designation. Thus, the companies held in the portfolio are in general alignment with the transition to a low-carbon economy. No companies held by iShares US Insurance ETF are recognized as being involved in controversies at a high or severe level. From bribery and corruption to workplace discrimination and environmental incidents, controversies are incidents that have a negative impact on stakeholders or the environment, which create some degree of financial risk for the company. Severe and high controversies can have significant financial repercussions, ranging from legal penalties to consumer boycotts. In addition, they can damage the reputation of both companies themselves and their shareholders.

One potential issue for a sustainability-focused investor is that iShares US Insurance ETF doesn’t have an ESG-focused mandate. Funds with an ESG-focused mandate are more likely to align with the expectations of an investor who cares about sustainability issues.

ESG Commitment Level Asset Manager