BlackRock readies first environmentally aware money market fund for individual investors

BlackRock Cash Management has filed an amendment to the registration statement for the BlackRock Money Market Portfolio to convert it to the BlackRock Wealth Liquid Environmentally Aware Fund (WeLEAF), the first environmentally aware money market product dedicated to the US wealth market. 

WeLEAF will expand BlackRock’s nearly $8 billion1 suite of environmentally aware cash products, offering retail clients the option to align their cash investments with their sustainability objectives.

WeLEAF, a retail prime money market fund, will seek to invest, under normal market conditions, at least 80 per cent of the value of its net assets, plus the amount of any borrowings for investment purposes, in securities whose issuer or guarantor, in the opinion of BlackRock, at the time of purchase, meets the Fund’s environmental criteria. Under the Fund’s investment policies, an issuer or guarantor may meet such criteria if it, at the time of the Fund’s investment, has better than average performance in environmental practices. The Fund may also invest in green bonds where, in the opinion of BlackRock, the use of proceeds from their sale will be used to finance projects intended to generate an environmental benefit. WeLEAF will not invest in securities issued or guaranteed by entities that derive more than 5 per cent of their revenue from fossil fuels mining, exploration or refinement, or from thermal coal or nuclear energy-based power generation.

“We have received overwhelming support from clients large and small since the launch of our Liquid Environmentally Aware Fund (LEAF) series of sustainable money funds,” said Thomas Callahan, Head of Global Cash Management at BlackRock. “Client interest in our LEAF series has revealed tremendous demand for sustainable liquidity management. WeLEAF was designed to answer the call of our Private Wealth distribution partners, who are seeking a money market fund product that appeals to the growing segment of their clients that care deeply about sustainability and climate risk.”

In 2019, BlackRock launched the industry’s first environmentally-focused cash management strategy, the LEAF series, for institutional clients in the US. Today, the LEAF series, which includes funds that incorporate environmental, social and governance considerations, comprises nearly $8 billion1 in assets managed by BlackRock.

In addition to using at least 5 per cent of its net revenue from management fees it earns through WeLEAF to purchase and retire carbon credits either directly or through a third-party organisation, BlackRock also has a licensing agreement with World Wildlife Fund (WWF), a leading environmental nonprofit dedicated to environmental and wildlife protection. As part of the agreement, BlackRock contributes annually to WWF to help further its global conservation efforts. With respect to BlackRock’s purchase of carbon credits, such purchases will be made at least annually, with BlackRock maintaining the option to increase, decrease or terminate these purchases in its sole discretion at any time. With respect to BlackRock’s licensing agreement with WWF, (i) BlackRock will make a payment to WWF in 2020; (ii) WeLEAF and its underlying investments are not endorsed by WWF; and (iii) WWF has no responsibility for, or role in managing or administering, WeLEAF or choosing any of WeLEAF’s investments.

Expanding LEAF is part of BlackRock’s commitment to clients to increase access to sustainable investing for all types of investors and make sustainability integral to how the firm manages risk, constructs portfolios and designs products.