Sustainable, Responsible &/or ESG Policy:

This fund tracks the iBoxx MSCI ESG GBP Non-Gilts Index, applying ESG screens to exclude issuers with exposure to controversial sectors (e.g., tobacco, thermal coal, controversial weapons) and those with significant ESG controversies or violations of international norms. The index methodology incorporates MSCI ESG ratings and controversy assessments to systematically remove issuers that do not meet minimum sustainability standards. The fund aims to reduce ESG-related risks and promote responsible investment practices by favoring issuers with stronger ESG profiles. While not focused on specific environmental or social themes, the fund indirectly supports positive outcomes by avoiding investments in sectors with negative externalities. ESG metrics such as weighted average ESG score and sector exclusions are used to assess the fund’s sustainability alignment. This approach provides investors with a sterling-denominated bond portfolio that integrates ESG considerations without compromising financial integrity.

Process:

This fund passively tracks the iBoxx MSCI ESG GBP Non-Gilts Index, which applies a structured ESG screening process to a universe of sterling-denominated investment-grade corporate bonds. The index excludes issuers with exposure to controversial sectors such as tobacco, thermal coal, and controversial weapons, as well as those with significant ESG controversies or violations of international norms. ESG data is provided by MSCI ESG Research, which supplies ratings and controversy scores used to filter out unsuitable issuers. The remaining bonds form the basis of the index, which the fund replicates. The index is periodically rebalanced to incorporate the latest ESG data and maintain alignment with its sustainability criteria. BlackRock uses internal oversight and compliance mechanisms to ensure the fund adheres to its ESG policy and continues to offer investors a responsible fixed income solution.

Resources, Affiliations & Corporate Strategies:

Teams with sustainability-related areas of focus:

Sustainable & Transition Solutions team (30+ professionals) leads BlackRock's sustainability and transition strategy, drives cross-functional change, supports client and external engagement, powers product ideation, and embeds sustainable expertise across the firm in partnership with other teams.     

Sustainable Investment Research & Analytics (10+ professionals) within the BlackRock Investment Institute produces thought leadership and research on the implications of the transition on portfolio construction. They produce macro and portfolio research, including integrating climate into BlackRock's Capital Market assumptions ("CMAs").

BlackRock Investment Stewardship (60+ professionals) serves as an important link between clients and the companies they invest in, engaging with investee company leadership and proxy voting at shareholder meetings when authorized by clients to do so. Where appropriate, BIS engages with companies on climate-related issues

BlackRock Active Investment Stewardship (10+ professionals) partners with BlackRock’s active investment teams on company engagement and voting in relation to their holdings.  BAIS was established in January 2025 to more closely align the range of investment strategies on the active investment platform. 

Corporate Sustainability leads efforts to drive operational sustainability, establish sustainable business programs and policies, and engage key stakeholders on BlackRock’s contribution towards the low-carbon transition and establish BlackRock’s operational sustainability goals.

 Sustainability incorporated into broader functional responsibilities:

Investment Divisions: BlackRock investment divisions include Portfolio Management Group, Global Markets & Index Investments, and Equity Private Markets. Active portfolio teams manage exposure to financially material E, S, and/or G risks, and consider financially material E, S, and/or G information in their investment processes, as applicable and consistent with client goals. Investment teams can often have sustainability-focused units (e.g. Fixed Income ESG Investment Team), as well as investment themes dedicated to sustainable funds (e.g Decarbonization Partners, and Climate Infrastructure)

Risk & Quantitative Analysis Group (RQA) is BlackRock's risk management function. The group is responsible for BlackRock’s Investment and Enterprise risk management frameworks and serves as a key part of the second line of defense along with BlackRock Legal and Compliance. RQA evaluates investment risks, including financially material E, S and/or G risks as part of regular investment risk management processes and, where applicable, during regular reviews with portfolio managers. This helps to ensure that such risks are understood, deliberate, and consistent with client objectives. RQA also has a dedicated Sustainability Risk group that partners with risk managers and businesses to oversee sustainability risk across the platform.

Global Product Solutions leads sustainable product innovation and development, governance, and strategy across the global product platform.

Government Affairs and Public Policy (GAPP) strives to engage constructively in financial services public policy dialogue, including in relation to climate risk and sustainability disclosures, through participation in industry initiatives, engagement with regulators and standard setters around the world, and through the whitepapers, comment letters and consultation responses regularly published on BlackRock's website.

Aladdin makes available climate and ESG data and physical and transition risk analytics into investors' workflows, regulatory reporting, and decarbonization/temperature alignment analysis delivered through Aladdin. The Aladdin Sustainability Lab (90+ professionals) oversees Aladdin's sustainability-, transition-, and climate-related data, analytics and innovation, including BlackRock’s Aladdin Climate platform.

Enterprise Services includes the Health & Safety team which monitors adherence to local environmental regulations. The Corporate Real Estate, Space Planning, Critical Infrastructure and Workplace Experience teams work alongside key stakeholders such as the employee-run Green Team Network ("GTN") to plan and implement sustainability efforts in offices. The Business Continuity Management team manages disaster recovery planning, strategy, and crisis management activities.