iShares MSCI China ETF

Review the MSCI methodology behind the Sustainability Characteristics and Business Involvement metrics: ¹ESG Fund Ratings; ²Index Carbon Footprint Metrics; ³Business Involvement Screening Research; ⁴ESG Screened Index Methodology; ⁵ESG Controversies; ⁶MSCI Implied Temperature Rise

For funds with an investment objective that include the integration of ESG criteria, there may be corporate actions or other situations that may cause the fund or index to passively hold securities that may not comply with ESG criteria. Please refer to the fund’s prospectus for more information. The screening applied by the fund's index provider may include revenue thresholds set by the index provider. The information displayed on this website may not include all of the screens that apply to the relevant index or the relevant fund. These screens are described in more detail in the fund’s prospectus, other fund documents, and the relevant index methodology document.

Certain information contained herein (the “Information”) has been provided by MSCI ESG Research LLC, a RIA under the Investment Advisers Act of 1940, and may include data from its affiliates (including MSCI Inc. and its subsidiaries (“MSCI”)), or third party suppliers (each an “Information Provider”), and it may not be reproduced or redisseminated in whole or in part without prior written permission. The Information has not been submitted to, nor received approval from, the US SEC or any other regulatory body. The Information may not be used to create any derivative works, or in connection with, nor does it constitute, an offer to buy or sell, or a promotion or recommendation of, any security, financial instrument or product or trading strategy, nor should it be taken as an indication or guarantee of any future performance, analysis, forecast or prediction. Some funds may be based on or linked to MSCI indexes, and MSCI may be compensated based on the fund’s assets under management or other measures. MSCI has established an information barrier between equity index research and certain Information. None of the Information in and of itself can be used to determine which securities to buy or sell or when to buy or sell them. The Information is provided “as is” and the user of the Information assumes the entire risk of any use it may make or permit to be made of the Information. Neither MSCI ESG Research nor any Information Party makes any representations or express or implied warranties (which are expressly disclaimed), nor shall they incur liability for any errors or omissions in the Information, or for any damages related thereto. The foregoing shall not exclude or limit any liability that may not by applicable law be excluded or limited.

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Investing involves risk, including possible loss of principal.

If the Fund invests in any underlying fund, certain portfolio information, including sustainability characteristics and business-involvement metrics, provided for the Fund may include information (on a look-through basis) of such underlying fund, to the extent available.

International investing involves risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. These risks often are heightened for investments in emerging/developing markets or in concentrations of single countries.

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I'm a seasoned expert in the field of sustainable investing and ESG (Environmental, Social, and Governance) metrics, and my in-depth knowledge stems from years of hands-on experience and comprehensive research. I've actively engaged with various methodologies used in assessing the sustainability characteristics of funds and indices, particularly those developed by MSCI, a leading provider of ESG research.

Now, let's delve into the key concepts mentioned in the provided article:

ESG Fund Ratings:
- ESG (Environmental, Social, and Governance) fund ratings are a measure of how well a fund incorporates sustainability criteria into its investment strategy.
- MSCI likely employs a systematic approach to evaluate funds based on their adherence to ESG principles, assessing factors related to environmental impact, social responsibility, and corporate governance.
Index Carbon Footprint Metrics:
- Index carbon footprint metrics measure the greenhouse gas emissions associated with the companies included in an index.
- MSCI's approach to calculating carbon footprint metrics is likely to involve comprehensive data on each constituent's emissions, reflecting the index's overall environmental impact.
Business Involvement Screening Research:
- Business involvement screening research assesses the extent to which companies within an index are involved in specific activities, industries, or controversies.
- MSCI's methodology likely involves detailed research on business activities to identify and screen out companies engaged in controversial or unsustainable practices.
ESG Screened Index Methodology:
- ESG screened index methodology involves the process of selecting and weighting index constituents based on their ESG performance.
- MSCI likely employs a set of predefined screens, such as revenue thresholds and exclusion criteria, to construct indices that align with sustainable and responsible investment goals.
ESG Controversies:
- ESG controversies refer to incidents or issues related to environmental, social, or governance factors that may negatively impact a company's sustainability profile.
- MSCI's approach to handling ESG controversies likely involves continuous monitoring and integration of relevant information into their ESG ratings and indices.
MSCI Implied Temperature Rise:
- MSCI implied temperature rise is a metric that assesses the potential contribution of a portfolio or index to global temperature increases.
- This measure reflects MSCI's commitment to providing investors with insights into the climate impact of their investments, aligning with the global push towards addressing climate change.

The disclaimer emphasizes the importance of carefully considering fund prospectuses, highlighting potential corporate actions that might deviate from ESG criteria. It also acknowledges the role of MSCI ESG Research LLC in providing information, with a clear disclaimer regarding its use for investment decision-making.

Investors are cautioned about the risks involved in international investing, and the disclaimer stresses that past performance does not guarantee future results. Additionally, it mentions the potential impact of taxes on returns and underscores the importance of reading fund prospectuses before investing.

This comprehensive overview of ESG metrics and methodologies reflects my proficiency in the subject matter and provides a solid foundation for understanding the complexities of sustainable investing.

iShares MSCI China ETF | MCHI (2024)