BlackRock has rebranded or adjusted the methodology of 135 exchange-traded funds (ETFs) and investment funds in response to new European Securities and Markets Authority (ESMA) guidelines on fund naming, driven by a “client-informed approach.”
The changes, which affect the world’s largest asset manager, include the removal of the ‘ESG’ designation from its iShares MSCI ESG Screened UCITS ETF range and the BSF Systematic ESG World Equity Fund. These 51 strategies, collectively managing $51 billion in assets, will retain their Article 8 classification under the Sustainable Finance Disclosure Regulation (SFDR).
BlackRock’s decision to drop the ESG label from its ‘light green’ funds follows client feedback favouring a name change over adjustments to investment methodology. Meanwhile, its ‘middling green’ suite—comprising 18 strategies with $42 billion in assets—will align more explicitly with climate transition goals. The MSCI ESG Enhanced ETF range will incorporate the Climate Transition Benchmark (CTB) designation, and the BGF European Equity Transition Fund will see updated disclosure language.
Additionally, 60 ‘dark green’ strategies, managing $92 billion, will begin implementing Paris-Aligned Benchmark (PAB) exclusions. The SFDR Article 9 products affected include the BGF ESG Multi-Asset Fund and the iShares MSCI SRI UCITS ETF range. However, 17 funds in BlackRock’s sustainable investment portfolio, including its PAB suite managing just under $5 billion, will remain unchanged.
The updates come ahead of ESMA’s 21 May deadline, which requires EU funds to meet stricter criteria to include ESG or sustainability-related terms in their names. In a client note BlackRock stated: “To adapt to these changes and refresh our European product range, we consulted with a significant number of clients—including large distributors, product selectors, and portfolio managers—to seek their views and understand their preferences. Based on this feedback, we have focused on providing clients with transparency and, where relevant, retaining investment methodologies consistent with their preferences.”
BlackRock’s moves mirror a broader industry trend in response to ESMA’s guidelines. MSCI data shows that by the end of February, the number of funds with sustainability-related names had declined by around 20% since the regulations were introduced last May. Research by ISS STOXX suggests that up to 84% of Europe’s sustainable fund universe could be affected under a strict interpretation of the rules.
Other major asset managers have taken similar steps. BNP Paribas Asset Management recently removed ‘ESG’ from an S&P 500 ETF, following moves by DWS and State Street Global Advisors (SSGA). Meanwhile, UBS Asset Management and DWS have rebranded multiple ETFs after MSCI renamed over 100 ESG indices.
The changes underscore a shift in the sustainable investment landscape, with fund providers prioritising transparency and compliance while maintaining existing investment strategies.
